Economics and similar, for the sleep-deprived
Does anyone have any idea what might be done about the pointless blob of white space above this paragraph? It seems to be resistant to all my efforts. Update haha, it succumbed.
Monday, October 14, 2002
Sowin' the seeds, the politics of greed
Yes, another entirely original title made up purely by myself ...
One of the finest phrases Margaret Thatcher came up with1, she came up with in the context of the 1988 Budget, the lynchpin of which was a sudden, slashing cut in the top rate of income tax from 60% to 40%. An earlier budget had cut the top rate from 83% (ask yer grandad) to 60%, but the 1988 cut was the most breathtaking, because it came in the context of a budget which offered almost literally bugger all for everyone else. Obviously, this kind of chutzpah takes some selling, and the phrase all over the Tory media that summer (budgets used to be in the Spring in the UK, ask grandad again) was the resonant accusation that anyone who complained about massive tax cuts for the rich combined with swinging reductions in benefits and social spending, was guilty of ...
"THE POLITICS OF ENVY"
An absolutely marvellous phrase, it probably did a hell of a lot to persuade a generation of red-braced, spectacle-wearing yuppies that right wing politics were cool. It absolutely neutralises any attempt to portray the greedy party as being greedy, because it turns the charge right round 180 degrees, with a smarmy insinuation that people get involved with left wing politics because they're horribly and unattractively jealous of the rich, but they are too intellectually or personally inadequate to become rich themselves. Which is actually probably true of a lot of members of left wing political parties, which is why it was such a great piece of propaganda. Anyway, the left has had an inferiority complex about this phrase for the best part of fifteen years now, so I'm here to help us take it back.
Consider for the moment, the dockworkers of the ILWU, who were on strike until recently, and who earn around $100,000 a year for doing a job that basically involves attaching a hook to a container and giving the thumbs-up to a bloke in a crane.
Now of course, when you read a sentence like the one above in a media account, how you react to it depends on who you are. If you're Nathan Newman, you start immediately pointing out that it's a lock-out, not a strike, and giving us lots of extremely useful chapter and verse on the Taft-Hartley Act. If you're the ILWU, you start pointing out at length, what a skilled, complicated and dangerous job being a longshoreman is. And if you're Max Sawicky, you start interrogating those numbers a bit, and finding out that the sum of $100K is an utterly misleading, high-balled estimate, completely unrepresentative of the average dockworker's take-home pay and provided by management to an uncritical media.
But if you're me, you just think:
"Fucking good on them! When one thinks of all the arseholes pulling down a hundred thousand for doing next to nothing, why shouldn't someone get the same for hauling crates and occasionally half-inching the contents? They must have a bloody good union, good luck to them!"
The same goes for the London Underground platform staff, who get paid more than trained nurses (because they've got a good union), the Royal Mail postmen, who are the highest paid manual workers in Europe (because they've got a good union) and the Air France pilots, who regularly bring half of Europe's holiday traffic to a juddering halt (because they've got a good union). They may not be *worth* what they're getting, but the plain facts of the matter is that they're *getting* what they're getting, so who are we/you/anyone to start moralising over the contents of another man's pocketbook? Union members have higher salaries than those which would prevail if there were no union, and they often act like cartels through the closed shop, but if you are honestly of the opinion that this is the greatest injustice at work in our land, then there's something wrong with you. This is the only consistent view to take; anything else is purely and simply the politics of envy.
I think my view is shared generally; among the normal people I occasionally talk to, I really don't get any seething feeling of injustice at the fact that union men drew a lucky ticket. Even from women and black people, who often have a pretty damn good reason to object to some of the less reputable practices of some of the less reputable unions. This is true for the same reason that it was always a silly idea for the left to get all worked up about "CEO salaries" and about higher rates of income tax; the vast majority of people (that class of people which is sensible enough not to join political parties) is just not as venial, jealous and simply fucked-up with negative emotion, as that small segment of it which takes an active interest in party politics. The politics of envy, at base, involves projecting one's own lowered sense of self-esteem onto a public which, by and large, doesn't share it.
This is a useful analysis, because I think it can also be used to explain another phenomenon which mystifies people other than myself; the widespread popularity of subsidised university education, and the widespread unpopularity of measures aimed at making students go into debt. There is a line of argument under which it is argued that, because graduates earn so much more than non-graduates, to subsidise education out of general taxation is regressive; it's a "reverse Robin Hood" tax which takes money from carpenters and plumbers and hands it to merchant bankers.
On the other hand, once one stops looking at this through the lens of the politics of envy, it makes more sense. Young person gone to university and earning a big salary? Good luck to 'em. Why should they be saddled with a big debt? It's absolutely horrible being massively in debt, particularly if your repayment bill is very large in relation to your current disposable income (whatever its possible relationship to your lifetime earnings). Who would want to saddle a young person with that kind of burden, just at the time when they ought to be enjoying themselves? Not anybody I know, whatever their income. People fundamentally don't care about paying a couple of extra quid on income tax in order to subsidise an idyllic three years' idleness and alcoholism, so long as they have a reasonably fair expectation that it's handed out equitably and so long as they get to grumble good-naturedly at its public expression. The state sponsorship of university eduation is a subsidy to happiness. And as such, it (along with a close cousin, generous unemployment benefits) could only be opposed by someone who was at bottom, appealing to the politics of envy.
1Or possibly Nigel Lawson.
posted by the management 10/14/2002 10:46:00 AM
Friday, October 11, 2002
Banging My Head Against Linear Economics
As I've written elsewhere recently, banging your head against a wall is a hobby which has probably got a bad rep as a sort of shorthand for the acme of pointlessness. After all, you strengthen your head and neck by doing so, and a well-placed headbutt can be a fearsome weapon (for the interested, here's a guide). And sometimes the wall breaks, which is cool ... However, repeatedly smacking your head against a brick wall is not a recommended method of conditioning for any school of martial arts of which I am aware, and, although I will stand up for the intellectual equivalent, anything which makes you want to physically beat yourself unconscious is most likely to be avoided.
All of which pointless rambling is meant to a) demonstrate that this weblog jumped the shark weeks ago, and b) introduce a few comments on an idea of Jason McCullough's that I've been meaning to put down for a while.
Jason runs the perfectly fine weblog "Hronkomatic", which would be in my link list if I could be bothered maintaining one. It's in the MaxSpeak list, so you're only two clicks away from it (by the way, here's the new linking policy; if Sawicky links to you, I don't need to, and if he doesn't, I probably don't want to. I'm sure this is massively unfair; special cases can make their plea in the comments section or something). In order to save you the pain of trying to get to grips with his archives, I've reproduced the post below:
Thursday, September 26, 2002
I've been seriously considering the half-assed suggestion I made a while back to completely eliminate taxes and fund the government entirely through bonds. The obvious problems with this are issues of cost distribution (would the poor necessarily end up paying more than the rich under an all-bond system, though?), effects on the net level of investment, and the tendency of this system to east the constraints on government spending (which is a good thing or a bad thing, depending on your bent). So, here's an estimate of how it'd change investment.
According to this, the MPC for the U.S. is about .85. The change in consumption by entirely eliminating taxes should, therefore, be MPC * G while the change in investment is (1-MPC) * G - G = -MPC * G. Investment would drop by 177 billion, or 20%. Unfortunately, I'm using the APC here to estimate the MPC, because I can't find an estimate of the MPC for the life of me. You'd assume it should be lower than the APC, though.
Is there someway for the government to incentivize investment to make up this shortfall, without taxes? Another interesting possibility: rational expectations implies consumption and investment should, over the long run (the level of investment should be determined by the desired future level of income), be completely unchanged; would total consumption (government spending included) and investment return to their previous levels?
I'm toying with this theory because it completely eliminates the tactic of conservatives limiting the size of government with deficits; they'd have to actually argue against spending on the merits.
It's quite a jolly idea in its own way. The obvious objection being, who's going to buy these bloody bonds if you've abolished the taxes that are meant to pay them back, but apparently according to Jason, he's aware of that. The idea is to give us a temporary holiday from taxes, which is something I'm in favour of; let future generations pick up some of their share since they're the ones who will get most of the benefit from the current technological revolution. But I don't want to get into the specifics of this scheme, mainly because I don't want to steal Jason's thunder. I'm interested in the calculation in the middle.
Jason clearly knows his Keynesian multiplier maths, but this extreme case shows up some serious deficiencies in the model. We actually get an apology for having used the Average Propensity to Consume instead of the "theoretically correct" Marginal Propensity. Now riddle me this:
Is the removal of the entire system of taxation a "marginal" change?
Is it hell. It's a massive, huge, earth-shattering change. The MPC is the amount which you would consume out of a marginal extra dollar. If someone gives you a sum of money equal to 40% of your income, would your behaviour be proportionately the same as if they gave you a dollar? Of course not. So where did Jason go wrong?
The ugly and tragic secret is that he didn't go wrong at all. Of all the operationally usable models of neoclassical eocnomics, there's not a one of them in which it is not assumed that marginal rates of preference are constant. The possibility of diminishing MPC with respect to wealth or income is certainly acknolwedged in theoretical discussion, but these models aren't used in any "live" applications because they aren't tractable given the mathematical toolkit of most economists. In fact, as Steve Keen points out in the book I reviewed here a while ago (hmmm, must do some more book reviews), you can't even derive anything so simple as a conventional downward-sloping demand curve without assuming conditions which imply a constant MPC.
This is a really, really nasty flaw in economics as she is done. Most economic things are of a nature to be best modelled in a non-linear fashion. Linear modelling works as a local approximation at best. But most things that you might be interested in modelling in economics aren't small incremental changes; they're big changes in important things. Linear approximations are, very probably, very wrong indeed.
But when you point this out to the general mass of academic economists, as Paul Davidson has been doing for years, you get treated as a harmless loony. If you try to teach economists the sort of mathematics they might need to correct these massive holes in the models, as Barkley Rosser has been trying to do for a while, your general reward is exclusion from the mainstream of academia, plus snotty articles from the likes of Paul Krugman accusing you of having "Santa Fe syndrome" and of using sophisticated mathematics "precisely because they seem to absolve intellectuals from the need to understand the models that underpin orthodox views"1.
It's like banging your head against a brick wall ....
1This is quite a long article, but worth reading all the way through for the mixture of good sense and overpowering blinkered arrogance which is Krugman's signature. Particularly funny is the bit where he accuses John K Galbraith of not understanding mathematics, because it led on to this piece where he accused James K Galbraith of also not being able to hack the math, and as a result got his head handed to him in this debate. The point being that Galbraith pere was an old-school institutionalist, but Galbraith fils is a scary linear algebra whizz. It is not impossible that Krugman confused the two.
posted by the management 10/11/2002 09:19:00 AM
Move over son, the professionals are here
Evolutionary psychology week lasted all of two days ... I will put up my own argument about Randy Thornhill's theory of rape, and a few others, pretty soon. But I've just rediscovered this article by Val Dusek, which is the best thing I've read on the whole debate. It also reminded me what a perfect shit Stephen Pinker looks when you know a little bit of the background to some of the things he says about Margaret Mead. Print out and read on the train home, that's my advice.
edit God damn that article's good. I'm amazed to discover the extent to which I'd subconsciously plagiarised it.
edit again Damn me, it's good. I think I'll excerpt a non-representative chunk here, because it sort of buries a point which is, I think, profoundly important:What Dennett would have to counter is Lewontin and Sober's argument that when selection coefficients of genes are context-dependent and selection acts on gene complexes, the artificially constructed selection coefficients of genes do not play a causal role. (Sober and Lewontin, 1984). It is true that if one claims that what is selected are not genes but replicators as the later Dawkins does, then whole genomes, incorporating all the contextual effects of genes on each other, might be the object of selection. This would preserve the restriction of selection to the genic level, but it would give up the atomization of modular traits with which evolutionary psychologists work.
Massively important, given that now we have the results of the Human Genome Project in, we *know* that most inherited human behavioural traits will have to have been selected through gene-complexes rather than individual genes. I have not yet seen the EP defence of their core doctrine that traits are modular in the face of this new development; I'd appreciate any pointers to the literature if there are good arguments that the doctrine either can be preserved, or is not actually necessary to the theory.
posted by the management 10/11/2002 03:55:00 AM
Thursday, October 10, 2002
Tits on a Peacock
Evolutionary Psychology week continues ... I'd note in this context that I don't have a complete knock-down argument against evolutionary psychology, mainly because if I did, it would also presumably be a knock-down argument against ethology, which would be damn close to a knock-down argument against evolution. More or less everyone agrees that behaviour can be subject to natural selection, and that's all you need to believe in before you're committed to *some* sort of belief in *some* kinds of explanation of psychological phenomena as evolved responses. What I'm most concerned with arguing against is "Neo-Darwinian Sociology", a close cousin of evolutionary psychology, and one which has repeatedly interbred with its less reputable cousin, with predictable results1.
In honest fact, using the phrase "Neo-Darwinian Sociology" is actually an act of extreme politeness on my part, because the more concise phrase would be "Social Darwinism", the age-old and known horrible theory without a shit-eating, disingenuous and self-consciously pious denunciation of which, no pop EP book is complete. (Matt Ridley, I'm looking at you. Daniel Dennet, you can wipe that smile off your face too). It's kind of like the paramilitary wing of evolutionary psychology; the default position of a serious ethologist when confronted with the possibility of earning a quick two hundred quid for 400 words on some current issue in the Sunday papers (Richard Dawkins, I'm looking at you, and pointing at you). Basically, in so far as these pieces have any message which doesn't consist of laughing at people more intelligent than the author for believing in God, the message boils down to:
- Psychology of individuals is sociology; there is nothing to be understood about social phenomena other than individual behaviour. (The main argument for this proposition is that sociology is carried out by sociologists. The secondary argument is that some sociologists vote for left-wing political parties. Don't ask me, I'm only here for the beer)
- Genetic explanations are the most important kind of explanations. If something could have come about through sexual selection of a gene, then it is overwhelmingly likely did come about in that way. Any other kind of explanation is very much second-best, and is probably about to be proved false by the discovery of a "proper" explanation. (The argument for this is rarely spelt out; as far as I can tell, it is some degenerate version of Occam's Razor)
- Although just-so stories about hypothesised past development are no more than indicative initial hypotheses when we're doing proper rigorous ethology, they're strong enough that you can draw massive overarching social policy conclusions from them when you're talking to the plebs. (There is no argument for this at all, but I'm guessing it's part of the organisational pathology which gets these things into print)
Push them on any of these points, however, and they immediately retreat to vastly more defensible ground, only talking about specific results, qualifying all their statements and pretending that their sentences should never be (could never possibly have been) taken to imply things which they quite obviously say. Of course, given that we're dealing with Dawkins, Pinker, and arseholes of similar magnitude here, they tend to carry out this retreat with the full pomp and circumstance of a Roman triumphal parade, insulting people's intelligence, taking every opportunity to revive assertions they've walked away from and if at all possible, trying to imply that their interlocutor is either a sociologist or a believer in God. I see that it will take a separate post on the roots of this behaviour in philosophy of science to drain away all my bitterness.
But anyway, that's "Neo-Darwinian Sociology", and I actually believe that I do have a knock-down argument against that, which I will outline in the next-but-one post in this series. For the time being, just note that I think I can support the claims that
a) if it wasn't for their occasional forays into N-DS, the EP crowd would be a very obscure bunch of scientists indeed.
b) NeoDarwinian Sociology is on a much weaker scientific footing than the rest of EP; those parts of EP which have impinged on the public consciousness are in general pieces of research which are distinctly suspect as works of science
and therefore
c) The entire existence of evolutionary psychology as a fact of public life rather than an obscure academic discipline depends on the willingness of some scientists to drop all their scientific standards at crucial moments. (In particular, I find it quite scandalous that Richard Dawkins is quite so unconcerned about the distortions of scientific method which are regularly indulged in by people he regards as his allies. Despite what he thinks, he is Oxford University's Simonyi Professor of the Public Understanding of Science, not the Public Proselytisation of Atheism).
and am also prepared to argue for
d) The fact that it's the evolutionary psychologists who have achieved such prominence through such means is, as they say, no coincidence; the entire method of inquiry of EP tends to inculcate habits of mind which are too quick to latch onto hypotheses and call them explanations, and which discourage rigorous system thinking in favour of particular anecdotes. In their professional work, practitioners seem to recognise these dangers and guard against them; in their popular work and their policy advocacy, they drop their guard. As you can tell, I'm working toward a theory of how a book as bad as "Blank Slates" by Stephen Pinker came to be written.
It's in support of d) that I am currently working. As with yesterday's post on symmetry and beauty, I want to provide an example not so much of questions answered wrongly, but of questions never asked in the first place; of theories adopted for a particular case because of the attractive story, but which were not applied to other cases, because they didn't fit the story being told. If I can establish that there are cases when, working near the borders of ethology and sociology but on the scientific side, evolutionary psychologists lost their critical faculties, I think I'll have supported my case that when they move closer to politics, they tend to be even worse. Tomorrow's example is going to be just a freaking doozy (Randy Thornhill's theory of rape), but for the time being, let's take a look at womens' breasts and peacocks' tails.
OK, I didn't get many takers for peacocks' tails. But let's start off with them. There's a fairly common theory about why peacocks have tails; it's not the only one in the literature, but's it's pretty well supported and it is frequently used by the EP crowd when they want to make an analogy to certain kinds of male behaviour. The theory is basically, that the male peacock's tail is so big not in spite of its inconvenience to the bird, but because of that incovenience. The idea is that it's a sexual signalling device; the peacock is signalling "Look at me, I'm so big and strong and genetically ace that I can carry around this huge great fucking ridiculous tail and still live a relatively normal avian life". So, the selfish genes of the peahen latch onto that signal, because they want to hitch a ride on this unstoppable Range Rover of peacock genetic goodness. It's quite a clever little theory; controversial as hell among bird biologists, but certainly not without supporters.
So anyway, a theory like that is too good to waste on peacocks, so it gets brought into service in explaining otherwise damnably stupid behaviour by human males with "peacock" tendencies. Bungee jumping, driving cars quickly, etc, etc. Jared Diamond (in an uncharacteristic slip; a terrible chapter of an otherwise good book called The Rise and Fall of the Third Chimpanzee) claimed that kung fu experts in Indonesia drink paraffin. The idea being presumably, to show off to any females present "HEY, LOOK AT ME! I'M ACTING LIKE AN IDIOT! I MUST HAVE GREAT GENES TO HAVE SURVIVED TO ADULTHOOD, I'M SO FUCKING STUPID! IT'S A MIRACLE I'M NOT EATING THROUGH A STRAW, BUT I'M NOT, SO THERE MUST BE SOMETHING SPECIAL ABOUT ME! COME ON AND GET ME YOU KNOW YOU WANT IT!". Obviously, the questions a) has there ever really been an "evolutionary adaptive environment" in which purposefully endangering your own life for no reason hasn't been a gene that sensible selfish maximisers would want to avoid like the plague? and b) does it not strike people who advance this "hazard theory" as perhaps surprising that much of the very most stupid and show-offish male behaviour in the world is channelled into initiation rituals of exclusively male secret societies of one kind or another? are quibbles and prove that the person asking them is a sociologist and probably believes in God.
Anyway, I sense that my audience is getting bored at this point, so on to the more popular topic of womens' breasts. As everyone knows, men like women with big, prominent breasts because they indicate that the woman upon whom they are located will be really good at feeding a child, thus propagating their genes to the next generation. Unfortunately, the bust size of a woman who has never given birth bears more or less no relationship whatever to the size at the end of pregnancy (breasts of nonlactating women are made mostly of fat, and it takes about eight months to properly shape them up to serve drinks), and this has been the case for a very long time in human evolution. This immediately rules out a lot of the "sub-pop" science commentators who use this kind of cargo-cult science theory of female pulchritude when they want to make some sort of point about sexual harassment in the workplace or the appeal of Pamela Anderson or whatever needs half a col. written about it by two-thirty prompt, but that's hardly a body blow to the EP crowd; most of these people are either editorial writers half-remembering the last pop science book they read, or people like Eric Raymond who are so damnably ignorant on every single subject except computers that it can't be blamed purely on "The Selfish Gene".
On the other hand, there are a lot of commentators who know better, who still basically come up with theories of the breast which involve some sort of signalling about fertility (not all; here's a list of theories on this issue, not all of which are vulnerable to the current critique). And here, we come to a conundrum.
If the theory of doing dangerous things in order to show how genetically fit you are is generally applicable, perhaps it could be applied to women as well as men? So, let's think ... what would be an extremely physically demanding and dangerous thing that a woman could do, which would work well to demonstrate her fertility? Well ... perhaps it's a bit off-the-wall, but here's one suggestion ... how about ... giving birth to a baby?!
Think about it. Some women are infertile, and can never give birth. Some women are not physically up to the rigours of childbirth, and this must have been even more true "out on the plains of Africa", to use the hackneyed and racially loaded catchphrase. One way, as a woman, of proving that this isn't true of you, is to actually step up to the plate and walk the talk. So, on this reasoning, men should be really turned on by single mothers ... is that your experience? Furthermore, if we extend this theory to go back to our original question about fashions in bust shapes, we can note that the stresses and strains of feeding the first child will certainly, pre the invention of the brasiere, have taken their toll on a maidenly chest. So, one could construct a convincing argument on evolutionary psychology grounds, that a female human equivalent to the display of the peacock's tail would be a large bust which drooped to somewhere south of the navel area. By putting on the Gossard Wonderbra and its competitor products, women appear to be attempting to signal to men that their fertility is a completely unknown property, and so is their vulnerability to death in parturition.
There is something decidedly funny about a grab-bag of intellectual tools which puports to explain the reason why things are the way they are, but which could simultaneously be used (as above) to explain why they were the way they were even if they were some other way. And there is something funny about a group of people who talk nine yards to Sunday week about the "intellectual rigour" they are bringing to a discipline like sociology, but who never seem to bother to generalise propositions, or to explain why mechanisms work in one case but not another. And there is something extremely funny about the way that a bunch of male commentators have been so quick to jump on board with a theory that, if it were not for the fact that it helps to bolster a number of propositions about sexual morality which they wanted to assert anyway, would be recognised as being about as likely and as useful, as tits on a peacock.
1Yes I know, I know. That was invective. In actual face, most medical opinion appears to be that the marginal risk of deformed offspring from copulation between first cousins is actually pretty negligible. So go for it if that's what you want, but don't tell the judge I told you to.
posted by the management 10/10/2002 10:54:00 AM
Wednesday, October 09, 2002
Thy Bloody Awful Symmetry
As well as the whole Michael Hardt/ David Hasselhoff thing below, my mind was turned to thoughts of evolutionary psychology by an article in yesterday's New York Times. Fundamentally, it's exactly the sort of work I was planning on doing; somebody's taking a look at the actual experimental methodology that supports such convenient factoids as "men are more concerned about sexual jealousy, while women worry more about emotional infidelity". It turns out that this "result" is incredibly fragile as to the situation of the experiment; if you sit people down, ask them the question straight out, and give them time to think, then men and women assign themselves correctly to their gender roles, whereas if you catch them off guard in order to get a more "instinctive" response, the differentiation "predicted"by an amazingly tendentious just-so story about cavemen in Africa just doesn't show up. (I'd note in passing that the EP crowd are often in the forefront of moaning about "double-blind trials" when they're on the attack on some other point; the methodology of having an experimenter with an agenda ask a question face to face and then write the answer down himself is about as far from double blind as it gets).
In any case, the main point of the article linked above is to show what total and utter patronising knobheads evolutionary psychologists can be when pulled up on a point of science (read it, honestly, the guy starts comparing himself to Galileo!). But it dovetails quite nicely with a couple of points I'd like to make about some other sacred cows of evolutionary psychology; specifically, some of those claims which the pop science gang like to make about the "genetic" foundations of human beauty.
It's a shame that I'm too mean to cough up for the version of this weblog which would allow me to put up pictures, but there you go ... but you don't have to search far on the web to find someone claiming it to be an established "fact" that facial attractiveness is a function of facial symmetry. Coincidentally, you also don't have to go far on the web to find a picture of Elvis Presley (bloody great asymmetric sneer) or Cindy Crawford (bloody great asymmetric mole on face). So what gives?
Apparently people with symmetric bodies have "good genes". Don't ask me, I'm a stranger here myself. But let's assume for the meantime that in some way, a little glitch in the building of the face of a foetus is evidence of a deep-seated horrible lurgey in the genes which is just waiting to show up as sickle-cell anaemia or low resistance to malaria or something. The question I'm interested in is, how did anyone find out that people with symmetrical faces are the most beautiful people of all?
Note at this stage, that I'm not interested in studies which claim to have shown that symmetrical people have more sex than anyone else. Randy Thornhill claims that this is the case, and it might be the case even though the experiments which claim to demonstrate it come from the same guy who brought you a theory of rape which doesn't work at all as a theory of sexual assault not involving penetration. Personally, I think that Thornhill is all over the place, and I'll explain why in future (there's a clue in this sentence for the impatient), but I want to establish that it doesn't effect my current argument if the symmetrical are shagging wild all over the place. The claim that "beauty" is "whatever gets you laid" is one that the EP crowd is committed to, not me. But this is by the by.
Absent the sex life studies, the evidence for "beauty" being this, that, or the other, has to come from what actual people judge to be beautiful. So, the best method for carrying out this experiment would have to be to get a bunch of people, show them a bunch of photographs of people, and get them to pick out the beautiful ones. Then you count the number of points each photograph gets and have a look at which ones are picked the most often, right?
Wrong.
If you ask people to pick out the photographs from a set which strike them as the most beautiful, you're actually asking them to perform cognitive acts, not one. You're asking your experimental subjects to:
a) notice a picture of a face
b) judge whether it's beautiful or not.
The first of these is not a trivial act, as anyone who's observed a baby younger than about two months will testify. The extent to which you're going to carry out the act of picking a picture for the beautiful pile depends on the extent to which it catches your attention as well as what you actually think of the face. There will be an error in your results from people "misclassifying" faces because they weren't really paying attention to them. There are all sorts of misjudgements that it's possible to make when looking at a two-dimensional image of a three-dimensional object; as the post below demonstrates, I quite seriously misclassified a picture of Michael Hardt's hairstyle as "bouffant" when it wasn't.
So far so good. Now, readers with extremely advanced degrees in econometrics won't be asking ... what do we know about this error? Importantly, is it unbiased -- can we assume for modelling purposes that it can be ignored as something that will in a large enough sample?
I'm arguing, no. One of the things that, broadly construed, evolutionary psychology has usefully done for us is to dig up some important insights into the neuropsychology of visual perception. Particularly, it's been noted (as in, anatomically observed) that there is a mechanism in the brain which is specifically adapted for distinguishing between symmetrical things and non-symmetrical things. I find the "evolutionary psychology" (in actual fact, ethology, the rather more serious parent discipline which looks at behaviour without making tendentious and unsupported claims) argument quite convincing in this regard. The reason we have a symmetry-detector is that very few things in nature are symmetrical except animals, and animals are only symmetric when they're looking straight at you. Since the fact that something is looking at you is almost always a useful thing to know, we have been provided with a very acute sense of whether a thing is exactly symmetrical or not. Symmetry is a property which "jumps out of the page".
So, given that photographs of symmetrical faces are more likely to be noticed, the errors are not going to be evenly distributed. In any study which is asking you to pick out a "noticeable" characteristic the symmetrical pictures are always going to be over-represented, because symmetry is a noticeable property. Furthermore, this property is highly likely to account for the fact that babies tend to look longer at the same photos which adults pick out of a pile as being most attractive, another factoid often advanced as evidence for the beauty=symmetry hypothesis.
I have no particular investment in believing that there is nothing aesthetically attractive about symmetry; I spend a lot of time with a sneer on my face, but that's mainly because I read a lot of right-wing weblogs. But the fact that nobody saw fit to inquire into this possible source of experimental failure tends to suggest to me that people want to believe in the "evolutionary" arguments for reasons other than those of pure science. And when you get people like Todd Shackelford responding to the Northeastern study by just saying ""I guess, to state it plainly, I think the paper is in large part ludicrous .. It's clear to me that they have an agenda they're pushing.", I think I'm on to something.
posted by the management 10/09/2002 09:50:00 AM
Tuesday, October 08, 2002
Michael Hardt's Hair: An Apology
It has been brought to my attention that a previous post on this website may have been somewhat unfair and/or not perfectly soundly rooted in fact. Specifically, a number of correspondents have informed me, both through email and through posts on their own weblogs, that Michael Hardt's hair is not really all that bad. Surveying the evidence, which includes a number of photographs not indexed by the google image search, I have come to the conclusion that they are right. Doug Henwood, editor of the periodical (Left Business Observer) in which the original photograph appeared, has suggested that what's happened is that with the "floating head" style of cropping, one loses important perspective cues from below the neck, making the do look more expansive and voluminous than it actually is.
I still don't like Hardt's hair; it's scruffy as hell, and in a few stills of him lecturing, it appears to wilt under lights, and look really bad. But it is not actually a "bouffant" in the pejorative sense; it appears that his hair is merely naturally curly and insufficiently frequently trimmed, causing it to grow away from his head in a natural manner (the hairstyle used to be known as an "Isro" back in more carefree and less PC days). So it would seem that, in retrospect, some form of apology to Prof. Hardt and to his barber would be in order. In particular, my suggestion that such a high-maintenance pompadour would require large amounts of alienated labour and environmentally unsustainable grooming products (which had the effect of suggesting that Hardt was not only vain and effeminate but a hypocrite) was unjustifiable.
Not retracted, however, is the remark made in the first edit to the original Hardt post, claiming that he had "a sort of Hasselhoff thing going on". I still think that this is true and that the publicity still on his website bears it out. Hardt is 42 years old, approximately 15 years beyond the point at which one can get away with that "tousled, boyish" image and maybe eight to ten years older than the expiry date for the denim jacket he is pictured wearing. It's difficult to see where this calculated scruff look is coming from; Hardt doesn't have the excuse of being a child of the sixties, because he was only nine years old when they finished. My worry is that, presumably unknowingly, the professor's sensibility is most tellingly informed by the 1980s' advertisements for Levi's jeans and their denim-clad youthfulness. In other words, he's the American equivalent of our own Jeremy Clarkson.
In semi-related news, the consideration of middle-aged men and their attempts to maintain the trappings of youth, reminds me that about a year ago, I promised to write a few bits on the general topic of "evolutionary psychology", and the time is probably ripe. Watch this space ...
edit: While I'm apologising, I might as well mention that anyone who's read the book "My Goodness" by Joe Queenan will perhaps recognise that I've lifted this "insincere apology as excuse for a few more jibes" gag from there. Since it was basically the only joke in the whole book, anyone who's read that book will be pretty sick of it, so sorry. Thinking about it, this cack-handed plagiarism has the effect of making my posts about Lawrence Lessig look rather hypocritical, so a qualified apology there. Anyone else?
posted by the management 10/08/2002 06:12:00 AM
Thursday, October 03, 2002
Politics and the English Language, redux1
From the ideas dept, except I actually care about this one, and it isn't stupid. Like Christopher Hitchens, Noam Chomsky and all the best people, I am "a great admirer of George Orwell". Nine times out of ten, of course, when people tell you that they admire Orwell, what they mean is two things; - they think they've found a way of twisting something he wrote so that it supports their own political views, and
- they're proud of the fact that they're the worst kind of pompous, annoying pedantic wanker about "Correct English Usage".
That's exactly how it is with me, anyway. I know just enough about Orwell to patronise American high school students on the Internet for only having read "1984", and have no plans to learn any more.
So anyway, where was I ... oh yeh, I'm a great admirer of George Orwell, and I think that if he were alive today, he would have some pretty trenchant views on the situation in the Middle East, and that, by chance, those views would coincide with my own. Christ, Hitchens makes this look so much more seamless when he does it...
Anyway, I'm a great admirer of George Orwell, and because of this, I really am in despair over the fact that, in more or less exactly the way he described in "Politics and the English Language", the battle of words with regard to the political future of the territory located around 31 30 N, 34 45 E has been so violent that ... well, that more or less the only way to refer to the geographical territory without marking yourself out as favouring one side or the other is by latitude and longitude. But I'm not here to fight that battle, or even to start discussing the massive misuses of language and the plethora of code-words on both sides. I'm here to make one particular suggestion to my own side; non-Israeli, Gentile, left-wing critics of the government of the State of Israel:
Let's just stop using the words "Israeli" and "Zionist" and replace them with "Likudist".
The battle over "it's possible to criticise Israelis without being anti-Semitic" and the battle over "not all Jews are Zionists, you know", has been either lost, or ground out to a bloody standstill, and the territory isn't worth fighting over. "Likudist" has the advantage of a more precise, laser-like focus on Ariel Sharon and his gang, and it isn't easily confused with "all citizens of the State of Israel" and thence on to "The Jews". It might not be strictly accurate in that I don't know which of the policies of the Israelis are specifically identified with Likud, but my guess is that anyone well-informed enough to be able to quibble about that will also be perfectly well aware of the reason why you can't use "Zionist" and "Israeli" in contexts where it would be natural to do so. At least this way it might be possible to gain some respite from what appear to me to be a lot of entirely disingenuous accusations of anti-Semitism, and perhaps to slightly retard the hellward progess of the handbasket carrying the English language.
Anyway, it's just an idea. Give it a try if you think it might make sense. In related news, isn't the Dalai Lama a bastard? He's always going on and on about the bloody Chinese in Tibet. Why does he single them out as being so terrible when there are things just as bad going on in Israel? Bloody Sinophobe.
1What the hell does "redux" mean, anyway? I just picked it up because they use it all the time on "Slate.com" and I thought it looked cool. I don't think I've ever seen it anywhere else.
posted by the management 10/03/2002 05:06:00 AM
Wednesday, October 02, 2002
Come as you are, pay as you go
Hello and welcome to "the Brad DeLong comments section defunct debates annex", or as it used to be known, "D-Squared Digest". If you're not a regular of the BDeL site, then the chances are that you're not confused the difference between defined contribution (DC) pension schemes and defined benefit (DB) schemes. But, for contributors to that site, sufferers from head injuries and anyone who has read a Cato pamphlet in the last two weeks (actually thinking about it, that probably constitutes a head injury), here's my best shot at explaining the matter simply.
The problem is simple; you want your employer to keep paying you after you stop working. I'm now going to offer a menu of alternative ways in which this aim can be satisfied:
1) Every month with your pay packet, your employer gives you an "extra" bit of money (perhaps with a different tax treatment to the rest of your wages) which you invest in a portfolio of bonds and equities. The size of the extra bit of money is determined by the amount which an actuary estimates you would need to invest every month to expect a retirement income equal to (say) half your salary on retiring.
This is a 401(k) style scheme
2) The same as 1), but the employer also offers you a deal; they will guarantee that if the investment return on your portfolio turns out to be not quite enough to give you that income on retiring, they will make up the difference. In return for this, they will probably want to take some of the upside if your portfolio does incredibly well. You have considerable legal protection in this matter; they can't lift any assets at all out of the portfolio without your consent, so you'll be in a decent position to negotiate with them when the time comes.
This is not a scheme which resembles anything in actual use, but it has some defined benefit elements.
OK, right now, before we get into anything more realistic, let's note one thing; it is absolutely clear that 2) is less risky than 1). Plan 2) is just plan 1), plus an arrangement with the company which can only decrease the volatilty of investment returns to you. You might think you could do better in terms of expected return under 1), but it cannot be lower risk than 2), because any portfolio you could have under 1), you can have under 2), and the guarantee can't make that portfolio more risky. Also note that you need to think about your risk/reward tradeoff not right now, but at retirement -- as in, if you make a huge killing on dot com stocks in your Plan 1) pension, you're unlikely to live long enough to spend it.
That's why we know that less of the investment risk is borne by employees under a DB plan than a DC
Just to re-emphasise this, the risk that your employer will go bankrupt and not be able to honour the guarantee is not an additional risk under 2), because if this happens,, 2) just collapses into 1). It would be a risk under this plan, not on the menu ...
minus 1) Your employer just goes on paying you after you retire
A "book reserve" pension scheme, popular in some European countries, albeit usually operated on an industry-wide basis rather than company-specific
... but that's not a DB plan. Anyway ....
The problem with 1) and 2) is that you will be restricted in what you can invest in as you get older, because you will want to be taking less risk. Also, your own personal portfolio is unlikely to be large enough to provide optimal diversification, leaving you bearing risks with no corresponding reward (I'm assuming orthodox finance theory here, give me a break). Because of this, your employer will offer you two other menu items:
3) A "pooled" version of 1). Under this scheme, your extra bit of money is pooled with those of all the other employees, and they are managed on a combined basis. If you leave your employer, you get your contributions to the pool, grossed up to reflect the investment performance of the pool.
This is a DC plan
Since the employees are all of different ages, the cashflow profile of the scheme will be the average of the cashflows of the individual plans, so effectively (simplifying somewhat), it can be invested as if it were being invested on behalf of an employee of the average age of the workforce. Hence, a bigger equity allocation than an individual employee would be able to sustain for most of his working life and (probably/hopefully) higher returns. I'm now going to state a proposition that I can prove mathematically, but won't because it's tedious:
For reasonable assumptions and the same level of contribution, 3) is better than 1)
Basically, unless you believe yourself to be a super ace stock picker (or at least, much better than the pool managers), you face a better risk/return tradeoff under 3). This is basically because big risk pools are better than small ones.
But wait, there's another option ...
4) A pooled version of 2), with the contributions pooled and managed in the manner of 3). You get a guarantee of some minimum level of pension, plus, if investment returns do better than the actuary expected, the windfall is shared between the company and you. The pooled fund is overseen by "trustees" who carry out the negotiations with the company on behalf of pool members, and from time to time, you can expect "pay rises" if you're retired, or improvements in the guaranteed level if you haven't, arising from this negotiation process. If you leave the company before retirement, you receive the actuary's assessment of your "fair share" of the assets of the pool, usually calculated on the basis of assumptions about the return on the pool's investment and the split of that return between you and the company.
This, in all its glory, is a typical DB plan
Again it can be clearly seen that if you stay with the company all your life, 4) is strictly less risky than 3), for the same reason that 2) was less risky than 1). If you assume that the two pooled options follow the same investment policy, then it ought to be the case that 4) is strictly to be preferred to 3) in that it offers a better risk/reward tradeoff, so long as the trustees are doing their job in looking after the pool members. Most of the DB scheme horror stories, like the Halliburton one doing the rounds at the moment, are of this man-bites-dog variety, where the trustees of the scheme have cut a bad deal for pensioners.
Things get a bit more tricky and opaque if you don't stay with the company until retirement. In principle, actuarially fair rules for calculating your asset share under 4) could be developed. However, in actual fact, you are exposed to the problem that a) the trustees and actuary are there to look after the pension fund members, not departing members (lawyers: don't quote me on this), and b) the actuary is always going to use an "expected rate of return" on the fund's investments in calculating your share which errs on the side of caution, because his primary duty is to ensure the soundness of the fund. I personally have moved between a number of DB schemes in my life, and have probably caught the thin end of this economic reality as a result.
So the real question about DB versus DC from workers' point of view is; are workers really so mobile these days that the commmonality of interest presumed by the pooled DB scheme is no longer an appropriate assumption? I've yet to see a serious study which concludes that this is anywhere near being the case in general.
So there you have it. Now, back to the trauma ward ...
posted by the management 10/02/2002 09:16:00 AM
But Most Of All, Michael Hardt's Hair1
I'm gonna have to reproduce this here, because I've been tittering inanely about it ever since I wrote it for a mailing list. It's about the new edition of Left Business Observer, an excellent publication to which you should all subscribe -- the current edition carries an interview with Michael Hardt, co-author of a weighty tome of political philosophy called "Empire".
The new LBO is out to email subscribers, and I would say something about its content, but I'm transfixed by the photograph on page 3 of Michael Hardt.
How the hell does he leave the house with that ... item on his head? For those who haven't received their copy yet, Hardt is pictured sporting a bouffant creation that, at my estimate, appears to stand about three inches proud of the surface of his skull in all directions. I haven't seen a "do" like that since Barry Manilow got out of the game. God knows what it must have been like in the radio studio with all that static electricity around; I'm surprised he wasn't mistaken for a microphone.
How much alienated labour in the hairdressing trade does it take to maintain this coiffure in its candy-floss perfection, to say nothing of the environmental despoliation? Can it be anything other than succour to the global Empire to know that its most prominent academic detractor looks like one of Herman's Hermits?
I'm guessing that the illus. came from a publicity photo and it isn't quite as extreme in civilian life. But hell, it's shaken me to the marrow. I can still see it as a floating retinal image when I close my eyes. Permanent revolution? Permanent wave, more like.
In actual fact, I wrote that one hastily and it doesn't come close to doing Hardt's magnificent barnet any kind of justice. It has the sort of scale and grandeur that one usually associates with novels by Tolstoy or tropical rain forests. Basically, the hair kind of gathers itself up from a point starting slightly below Hardt's left ear, and swoops majestically upward before cascading in a crashing, glorious, life-affirming, anemone-like plume on the top of his head. It's simultaneously unruly and immaculate; a perfect balance between pristine order and buzzing, bubbling chaos. It's like a Japanese painting of a breaking wave, except it's made out of Hardt's hair. You can't, simply can't gaze upon it without thinking that something should be done by the government, or possibly the United Nations, to preserve its epic beauty for the benefit of future generations. Maybe we could have Hardt laminated or cryogenically frozen or something ...
In actual fact, I don't really have anything against Hardt or his book. Everyone I know who's read "Empire" has said it's pretty crap, but the fact is that I hang round with such a crowd of deadbeats and Philistines that this means nothing; it might be the best book ever written in the English and/or Italian language for all I know. I wrote the short panegyric above for two reasons: first, because it really is an absolutely magnificent bouffe, and second, because in defending it as a serious comment and not a rather childish and churlish piece of common abuse, I get to make a couple of points about two particularly tiresome tendencies in discussions on the Left. But I digress; here first is my apologia.
The first argument I would like to make in defence of the proposition that everyone should take this post seriously and admire me for writing it, is that Hardt is an academic. He lives in an isolated, ivory-tower world, far removed from the reality of working class life, where a hairdo like that would be laughed off his very skull by the roots within five minutes . By mocking his haircut, I am bringing him into contact with the realities of day-to-day existence. Only people who live among the working class have any right to have any opinions on any subject at all, and the fact of his barnet reveals that Hardt does not. (I do not propose to enter into any correspondence relating to Hardt's workingclassitude, or indeed to my own status to cast aspersions on it. I've played the prolier-than-thou card first, so you lot can just deal with it).
The second argument would be that by having such a risible item on his head, Hardt brings the entire left into disrepute. How can anyone possibly envision a broad-based socialist movement if the common image of "a leftist" is a guy who looks like the bastard child of Jerry Lee Lewis and Madame Pompadour? It matters not that nobody else on the left looks like Hardt, or that there is a vast variety of different hairstyles sported by people who believe in the abolition of exploitation under the wage-labour relation of production. If anyone anywhere to the left of George Bush has any characteristic at all that anyone anywhere might object to, they must be viciously shouted down until they fall into line with the lowest common denominator.
Now, fair-enough, arguments based on the chauvinism of manual labour, or the special status of "activists" in having their opinions count for more, are on the fact of it more cogent and intelligent than just taking the piss out of a guy because you don't like his haircut. And probably, so are arguments against this or that leftwing group because they have unpopular opinions or engage in "destructive tactics". But are they really all that different? Face it, the main reason that there isn't a broad-based socialist movement in the USA (or many other places) is that nobody fucking wants one. Any other reason is pretty pointless, unless you just want to pin the blame on some other grouplet to justify starting a fight with them for your own purposes. Me, I blame it all on Michael Hardt's hair.
edit: Here's a picture.. Apparently he has a Hasselhoff-like "tousled" look as well as the more groomed publicity still which set it all off. I can't find the version I wrote about anywhere on the web, so I guess you'll have to subscribe to Left Business Observer to check it out.
other edit: On closer inspection, I think that the "groomed" version is just the "tousled" version, shrunk in Photoshop, cropped around Hardt's head and printed in black and white. He looks a lot less scruffy when you cut him away from that jacket, which may require a post of its own on some future date. You should still subscribe to LBO though.
1Anyone who recognises that song reference gets immediate expulsion from polite society.
posted by the management 10/02/2002 05:52:00 AM
Tuesday, October 01, 2002
What worries Joe Stiglitz?
Author's note: I'm actually steamed at the IMF at the moment over some of the bionically annoying things they've been saying about Brazil recently. But rather than get into a whole load of that, I thought I'd repackage the Stiglitz Critique of the IMFfor the peanut gallery. With, as usual, a chunk of saloon-bar language at no extra cost.
Joseph Stiglitz is obviously a hero of D-Squared Digest, because he used his Nobel Prize to do exactly what I would have done in the unlikely event of winning one; to immediately start arguments with everyone who ever pissed him off, in the knowledge that his opponents are on a complete loser because Stiglitz can end the argument at any time by saying "Look, sunshine, there's only one of us who's got a Nobel Prize here and it isn't you". He also picked a very, very pleasing target in the form of the current IMF, and if the calvalcade of twisted knickers we've seen from that institution in response is anything to go by, he struck a raw nerve the size of Lincolnshire.
For those sensible souls who couldn't be fagged looking up the details but just enjoyed the fight, Stiglitz had a very specific critique of the IMF to begin with (since the original IMF seminar where it all apparently kicked off, he appears to have signed off on the whole bill of goods of the crusty Seattle crowd). The original Stiglitz Critique went as follows:
- The IMF are not as damn clever as they think they are ("third-rate students from first-rate universities")
- They don't know as much economics as they think they do
- They're unsufferably arrogant that they are all that when it comes to economics, which given 1 and 2 above, makes them downright dangerous.
I don't want to get into the personality issues ... well, of course I do, but I don't know enough of the people concerned to do so. Instead, here's a central example of the sort of thing that Stiglitz is talking about; the question of "sequencing".
Basically, the "sequencing" literature revolves round the following idea (this para. cribbed from the excellent Dani Rodrik:
"Imagine landing on a planet that runs on widgets. You are told that international trade in widgets is highly unpredictable and volatile on this planet, for reasons that are poorly understood. A small number of nations have access to imported widgets, while many others are completely shut out even when they impose no apparent obstacles to trade. With some regularity, those countries that have access to widgets get too much of a good thing, and their markets are flooded with imported widgets. This allows them to go on a widget binge, which makes everyone pretty happy for a while. However, such binges are often interrupted by a sudden cutoff in supply, unrelated to any change in circumstances. The turnaround causes the affected economies to experience painful economic adjustments. For reasons equally poorly understood, when one country is hit by a supply cutback in this fashion, many other countries experience similar shocks in quick succession. Some years thereafter, a widget boom starts anew.
Your hosts beg you for guidance: how should they deal with their widget problem? Ponder this question for a while and then ponder under what circumstances your central recommendation would be that all extant controls on international trade in widgets be eliminated.
Substitute �international capital flows� for �widgets� above and the description fits today�s world economy quite well."
I'd recommend the whole of Rodrik's paper; it's an excellent summary of the literature, the basic conclusions of which are - that there is no definite relationship, nor even any particularly useful analogy between free trade in goods markets, and liberalised capital markets, and,
- most importantly, that a country which opens up full capital account convertibility in the context of a weakly capitalised or poorly regulated domestic financial system is asking for trouble.
It's important to note that these are really quite well-established results of the literature, with good theoretical foundations and decent empirical support. This isn't some wild heterodox theory; it's what one ought to learn at a decent graduate school if one studies the area at all. Note also that Rodrik's paper is dated 1998; it's not really "bleeding edge" stuff. While you're noting things, have a good old note at this whacking great collection of references to the sequencing literature, particularly this review article from the IMF's own economics team, also dated 1998.
So given that the sequencing question is mainstream economic thought, you might have guessed that it would be shaping IMF policy, right? Wrong. Although the IMF's economists will freely and happily admit, in public, that sequencing matters, I defy anyone to find an instance of an IMF program where a country with liberalised capital markets has been advised to impose restrictions, or even one where a country that has existing capital account controls has not been either required or strongly exhorted to remove them. The IMF knows (somewhat behind the times) that liberalisation of the capital account is something that should happen very late in the development process, but it can't put this knowledge into action, because to do so would be tantamount to admitting past mistakes, and would "slow down the pace of reform" at a time when reform desperately needs to be slowed down.
That's institutional arrogance, and the evidence to date is that it's seemingly incurable. That's why Stiglitz thinks there's no saving the IMF, and lots of people, myself included, are beginning to believe him.
posted by the management 10/01/2002 06:10:00 AM
Have you stopped murdering your political opponents?
OK, when I started this weblog, I promised myself that the two things I would never do because they're corny and cliched were:
- I would never waste time on articles about Anne Coulter
- I would never write articles that were just tiny incestuous retorts to other weblogs and which obviously belonged in the comments section of someone else's weblog
Time for the other shoe to drop ....
Brad DeLong has a thing going on at the moment about the main trope of Martin Amis' "Koba the Dread" (capsule review: don't bother) and about Eric Hobsbawm. Basically, the question is:
Q: Why is it that there are so many people who are generally liked and respected who are ex-Stalinists, while we hate and revile people with a Fascist background?
The usual answers to this question tend to involve tendentious corpse-counting, or slightly less tendentious assertions about the utopian ambitions and/or historical conditions pertaining to various political parties active in Europe in the 20th century. I think the answer is much simpler:
A: Because there are lots of ex-Stalinists around who are likeable, intelligent people worthy of our respect despite their political history, whereas ex-Fascists are in general a horrible bunch of people
People who like Eric Hobsbawm despite his Stalinist past do so because "well, you can forgive Eric Hobsbawm", not because "well, you can forgive Stalinism". If he'd been the same intelligent, generous, personable bloke, but had been a Nazi, he'd still have been forgiven. In actual fact, Nazi geniuses like Heidegger and Furtwangler were given the most incredible free pass while they were alive. It just happens to be the case that there were a lot of decent and intelligent British and American people who supported left-wing totalitarianism in the 20th century, while there were almost no decent and intelligent British and American people who supported Nazism. Or rather, it doesn't "just happen" to be the case; I'm personally of the opinion that a Nazi Hobsbawm would have been a psychological and sociological impossibility.
Look at it this way; the question is well-posed, but most of the attempts to answer it (including Niall Ferguson's and Brad's) are not. Eric Hobsbawm and all the other Stalinist comrades are, in general, forgiven. Old Nazis, in general, aren't. That's a sociological fact, and the question invites an explanation of why that sociological fact should be the case. My explanation is that it's a particular example of a lawlike generalisation; that Communists are in general nicer people than Fascists, so they get given more leeway. What most of the attempts to answer it seem to boil down to, is an attempt to deny the fact that they ought to explain; to attempt to reopen a judgement which has clearly already been made by society in general. If you start fulminating at Eric Hobsbawm and trying to claim that he's on the same level as David Irving, then all you're doing is making a short polemic of your own; you're not coming any closer to explaining the fact that Hobsbawm is a nice old man who likes jazz and Irving is a bitter and occasionally dangerous old bastard. Furthermore, you tend to come across as a bit of a loony, or worse, as Martin Amis, and the market for that sort of writing (basically, the Daily Telegraph) is already saturated.
That's basically what attracted me personally to left wing politics in the first place; there isn't so much downright nastiness to left wing political writing. You can usually forgive most lefty commentators the parts of their ideas which are insanely dangerous, illiberal or impractical, because you know that their heart's in the right place; for the most part, they're trying to help someone less fortunate than themself, albeit usually in a monumentally counter-productive way and without thought of the side-effects. With their equivalents on the right (and it gets worse, the further right you go), the subtext is always there "me me me". Galbraith said it, and these few words are to my mind worth every word John Rawls ever wrote, that "the project of conversative political thought throughout the ages has been that of finding a higher moral justification for selfishness". Since I'm strongly of the belief that it matters not just what we do, but what kind of people we are, that matters to me.
While we're on the subject, here's a question of the same kind that I regard as much more interesting (because more personal and less subject to political grandstanding) than the one about "who was worse?":
Q: Why is it regarded as vastly more acceptable for an adult male to attack a small child with the intention of causing pain in certain circumstances, than is for him to attack an adult female (presumably vastly more capable of defending herself) in exactly the same circumstances?
We've got MPs and prominent politicians (I believe the USA has too) who think it's OK to beat their children in order to punish them for insolence. How many of them would hang onto their jobs and status if they came out tomorrow and said that they hadn't mentioned it before, but they also beat their wives in similar circumstances? Ought to get a few comments on this one ....
posted by the management 10/01/2002 05:10:00 AM
Friday, September 27, 2002
Morale-raising exercise
In an excellent book called "On the Psychology of Military Incompetence", Prof. Norman Dixon mentions an anecdote immediately preceding the fall of Singapore in the Second World War, one of the worst military disasters in the recent history of the British Army. Brigadier Ivan Simpson, one of the few British commanders to emerge from the episode with anything approaching an intact reputation, had been loudly advocating the construction of defensive earthworks -- tank traps, moats and similar -- to impede the progress of any Japanese attack which might come from the North. The Commander in Chief, General AE Percival had repeatedly rejected these calls. Simpson decided to have one last go at persuading his commander, in a private meeting ... Dixon takes up the story:
" [...] At last, he grew exasperated. " 'But why won't you let us put up defences, sir?' I asked", Simpson recalls in his memoirs. He received the considered reply from Percival that devoting effort to defensive earthworks would imply that Singapore was not impregnable, and that this would be bad for morale. "My blood ran cold. 'It'll be a bloody sight worse for morale to have Japanese troops running round all over the place, sir'".
The idea that doing something about a problem might make things worse, because it would be tantamount to admitting that there is a problem, is almost always a bad one, but it is a common psychological defence mechanism for people who are excessively concerned with others' opinions of them, Dixon notes. Morale is certainly important, but it is too often used as an excuse to prolong or forestall the recognition of unpalatable truths, with eventual results that are, of course, as disastrous for morale as they are for anything else.
At present, the Federal Reserve isn't cutting interest rates, but is saying an awful lot about the dangers of the development of a "deflationary psychology". To which all I can say is "It'll be a bloody sight worse ...".
posted by the management 9/27/2002 06:40:00 AM
Thursday, September 26, 2002
A tale of two ladies
The first of the two ladies in question being Ann Coulter, a frighteningly rightwing television person, and exactly the kind of racy blonde1 that I don't hang around with any more since I set up home with the second, my own dearest Tess. (edit: Oh all bloody right then, I never used to hang around with racy blondes).
As far as I can tell, Ms Coulter is chiefly famous for writing a scurrilous book called "Slander", in which she makes the point, at length, that the intelligent, well-groomed and personable Americans we see on our TV screens and in newspapers are by no means typical of that country, and that the vast majority of American citizens are less well-educated, more insular and in most respects nastier. I don't know quite why she wants to portray such a bleak picture of that great land; perhaps she is a fifth-columnist of some sort. In any case, she's always banging on about the subject, and has become quite a popular hate figure among my American lefty chums. I dare say that if you click on the Maxspeak link in my right column and then click on any of his links to lefty weblogs (the ease of doing this is the main reason why I haven't bothered updating a proper link list of my own; sorry), then you're more likely than not to come across at least one post by an angry male American leftist explaining why she's absolutely horrible and they don't fancy her one tiny bit. All good clean fun.
But anyway, what I'm concerned with here is the main thesis of Ms Coulter's book, an idea which goes back to HL Mencken, that there are two Americas; a decent, intelligent, civilised one which is based in the great metropolises of the two coasts, and a horrible, stupid semi-human rabble organising Anti-Saloon Leagues and lynchings in the vast wasteland in the middle. Personally, I don't think it's that clear-cut; I've known a fair few Texans, and I spent a year growing up in Oklahoma, and there were lots of rather intelligent and good-natured people there. But let's for the sake of argument assume that Mencken and Coulter are right, and that the majority of the low-population density states are full of what Karl Marx (who agreed with Coulter and Mencken on this issue) called "the idiocy of rural life".
This would be the basis for the single most intelligent thing I've heard said about the 2000 presidential elections, which was said by Tess on the night itself. The points about whether the election was "stolen" or not, or whatever, are by the by. The really interesting and worrying thing about the 2000 elections was that, for the first time in a long time, the guy who got elected as President did so without winning a single one of the states where I, as a reasonably well-educated and Yankophile foreigner, might possibly want to live. The glamour of California? Blue state. The hustle and bustle and sophistication of New York? Blue. The quiet and scholarly elegance of Massachussetts? Blue. The go-getting, can-do spirit of Illinois? Blue. A whole lot of grass and cow shit? Almost exclusively red. The nearest that the Republicans came to a "nice place" was Florida and even then, a) it was a bloody marginal victory if it was a victory at all, and b) it's not exactly Biarritz, is it? Say "Florida" to ten Brits and you'll get ten replies of "cheap package holidays".
So in other words, one has to view American politics now through the lens of the fact that the Stupid Party is in control, and that a lot of the policies we are seeing (as well as being motivated by the War Party in full effect), are motivated by what Mencken called "the yokel's congenital and incurable hatred of the city man--his simian rage against everyone who, as he sees it, is having a better time than he is". It strikes me that this is a profoundly important fact for anyone deciding how they are going to vote in the next American election; now that the Republicans know that they can win the nation without tackling such "enclaves" as New York City or Los Angeles, it's not just a matter of the pro-abortion rightwing capitalist party versus the anti-abortion rightwing capitalist party. The 2004 race can quite simply be seen as a battle for civilisation itself, on a par with the Scopes Monkey Trial. So I may have to drop my usual strict rule of neutrality and insouciance when it comes to American politics, when it gets nearer the date. Of course, this is all conditional upon Coulter, Marx and Mencken being right about how horrible and stupid the inhabitants of "flyover country" are, which I don't necessarily believe.
Thinking about it, there may be deeper things at work here. Although Ms Coulter clearly dresses like a metropolitan sophisticate of exactly the type I'd like to see running the country, I get the suspicion that "Coulter" is an Irish name. And a quick search reveals I'm right. Specifically, it's a Scots Irish name with links to Lanarkshire in Scotland and to the unfashionable end of Ulster. "Bog Irish" rather than "Mick Irish", for those who are au fait with insulting epithets for our Hibernian pals. It's not a name that you'd expect to find attached to a silver-tongued, blarneying, cheerful Oscar Wildeish, Bernard Shavian, James Joycey happy-go-lucky Irish type. It's more of a Lambeg Drum type of name, associated with a group of people, the Protestant Ulstermen, who while they have many admirable qualities, are not exactly known the world over for open-mindedness or cosmopolitanism. Which suggests that being a bit on the stubborn and opinionated side is probably in the blood, and that there's not necessarily all that much that anyone can do about it.
My own dear Tess, of course, is a Cockney Sparrer a city girl through and through, and speaking as a Welsh yokel myself (with ancestry in the hardly swinging County Mayo), I don't think I could love anyone who wasn't.
1The link appears to be to "Jewish World Review", but as I mention, I'm pretty sure that she's not Jewish. I suppose she could be like Jennifer Aniston or something, but it's an Irish name. Maybe the Jewish World Review has an affirmative action programme for Gentiles or something. In any case, whether or not she is, obviously no anti-Semitic implication is intended.
edit: There is something of a controversy over whether states which voted Democrat should be coloured "blue" or "red". The current reading of the article is supported by USA Today. Please make allowances if you disagree.
posted by the management 9/26/2002 10:18:00 AM
Superficially similar sentences
They used to give this sort of test a lot when I used to go for job interviews and fill out psychometric tests. Here are three similar sentences:
- The US Government says it has evidence that Iraq provided weapons and training to Al-Qaeda
- The US Government has evidence that Iraq provided weapons and training to Al-Qaeda
- Iraq provided weapons and training to Al-Qaeda
- Iraq was involved in the September 11 attacks
Which of the preceding sentences does this news story support?
Which of the preceding sentences is it going to be used to support?
edit The correct answer to the first question is "I don't know". This is also, given our current situation, the correct answer to almost any question relating to Iraq in the present tense. As I've mentioned before, our only sources of information about Iraq in the present tense are the US Government and the Iraqi government, both of whom are proven liars on the subject. The only safe course of action is to regard all statements about Iraq as most likely deceitful.
posted by the management 9/26/2002 08:55:00 AM
Wednesday, September 25, 2002
Deep in my heart, I know I'm right
Well, it looks like I have materially misled readers on the subject of Iraq, and that the actual figure for oil exports is about four times what I said it was. I knew that the policy of never checking politically convenient facts would come back to bite me at some point, so I am perfectly content to admit that the oil exports permitted to Iraq amount to the princely sum of $1.25 per Iraqi per day (based on UN deductions of 40%) rather than the miserly 36 cents per Iraqi per day which I had claimed.
Having been so comprehensively found out by two contributors to my unfailingly excellent comments system, it would be churlish and unseemly to complain that $1.25 per day isn't all that much to live on either. So, that's what I'm going to do. Five bits is not enough to live on, full stop.
But, brainier readers will object, oil exports, gross of the UN deductions, are at about their pre-1991 levels, and the Iraqis weren't starving to death then, were they? Which is true, but which rather points up how misleading a comparison that is. Basically, in 1990 there existed in Iraq, alongside the oil sector, something which might be called "the rest of the economy". And these days, in many senses, there isn't. It got bombed to hell in the Gulf War, and it's been impossible to rebuild it in the intervening period because oil exports have been limited for most of the period to sums much closer to my original $4bn figure, the vast majority of which has had to be spent on food and medical supplies.
In actual fact, the CIA Factbook suggests that Iraqi GDP is around $2500 per capita at PPP rates, which would be around $6.8/day -- not a hell of a lot, but a long way above the World Bank poverty levels. But that's ignoring a further point, which as I mention in the comments to the original article, I should have been aware of earlier.
The point is that, it's really just not on for me to make the claim that one "can't live on" 36 cents a day. Even if that were the right figure, the fact that there are Iraqis today means that they are living on what they get. It was (oh ye benefits of hindsight) silly of me to suggest that the amount of money available to the Iraqi economy was not enough to buy food for its people. But, I call at this point on Amartya Sen, the greatest economist since the war (and if you want to argue about that, go for it in the comments; you will lose). In his groundbreaking work on famines, Sen points out that famines are never purely the result of shortages; they are economic catastrophes rather than ecological ones. Typically, the presence of a famine (or whatever the word might be for the pattern of deprivations visible in Iraq) is a sign that the price mechanism has broken down; that people who need the resources most are unable to get them. And the economy of Iraq has taken more of a battering than most in recent years, for reasons more or less entirely traceable to the blockade (see here for details of how significant this effect has been, and also here within that site for some suggestions that due to the regime of "holds" and "blocks" on items like fertiliser and medical supplies which could conceivably have military uses, the actual money available to Iraq is much less than the headline sum). Normal economic activity is not possible in Iraq under current conditions, so starvation and other equally nasty means of reaching premature death is inevitable. This fundamentally has nothing to do with the Iraqi military; even if Iraq were, per impossibile to pretend that it wasn't under constant bombardment and imminent threat of invasion and reduce the size of its Army to Swiss levels, it would still suffer from widespread unemployment and starvation, because in economic terms, there's no "there" there. The proof of the pudding, of course, is in the failure of the "change from within" strategy; surely to God, if history is any guide, then if anyone really believed that Hussein was starving his population in order to build himself palaces, they'd have revolted by now? The great mass of Iraqi people appears to believe that their misfortunes are the fault of the West, and they're right.
Of course, the main effect of Prof DeLong's critique is to weaken my support for an immediate shooting war (since the ongoing blockade isn't as hopelessly destructive as I'd thought) but to reinforce my case that Clinton is still culpable for hundreds of thousands of deaths in Iraq, possibly more. Most of the blockade period took place on his watch; while there might have been decent reasons for imposing it in the first place, nobody at the UN had really expected it to be kept in place as long as it was. The oil-for-food regime wasn't materially improved until 1998 and wasn't lifted until 1999, both times at the insistence of France and Russia and in the face of opposition from the USA and UK. So, like the quintessential internet kook that I am, I concede all important points of fact while maintaining all my substantive views.
posted by the management 9/25/2002 09:30:00 AM
Friday, September 20, 2002
Get yer money for nuthin' and your risks for free1
Friday afternoon thorts ... as I've mentioned before, absolutely central to finance theory is the concept of the "risk free rate of return". This makes an appearance in Classical economics as "the price of waiting", "the intertemporal rate of substitution", the "rate of time-preference", etc. It's an absolutely indispensable analytical tool for any economics which deals with the concepts of time and uncertainty (or to put it another way; it's hardly used in mainstream economic thought at all).
In so far as mainstream Neoclassical economics gets to grips with time at all, it deals with it by assuming that (since markets are efficient), the rate of time-preference, or the premium one is willing to pay to have "Bread Today" rather than "Bread Monday", is taken to be equal to the rate of return on a risk-free asset. After all, since markets are efficient, the rate of return on a risk-free asset has to be the price of something, and since it can't be the reward to risk-taking, it has to be the reward to pure waiting, right?
Well ... maybe. In actual fact, I have big philosophical problems with the concept of "pure waiting". It seems more or less incoherent to use the normal economic tool of ceteris paribus in this context. If you hold everything else the same except that you allow time to change, then you're saying that nothing changes, but time passes. But is time without change really a sound concept? How could we tell it had passed? But that's not what I'm on about right now.
For the time being, let's accept that "the reward to pure waiting is the rate of return on a risk free asset". What is a risk free asset? Name one. Sorry, MBA students, you just gave the answer "ten year government bonds", you are the weakest link, goodbye. As I've noted before, it's perfectly easy to lose your shirt trading ten year government bonds; they fluctuate quite a lot. They give you a more or less risk free return in nominal terms and over a ten year horizon, but those two provisos include a whole load of items which we don't want to count as part of the pure reward of waiting. Probably best to make a list first of potential investments which can't possibly be risk free:
- Any investment in physical capital (return depends on the rate of profit, which is variable)
- Any investment promising a fixed return in nominal terms (doesn't guarantee the level of consumption you can afford with the returns)
- Any tangible item not directly consumable (what you can buy with it will depend on relative prices, which are variable) -- this includes gold and land.
The most promising candidate left would be index-linked government securities, which promise that, on some future date, you will be able to buy the basket of goods represented by the CPI index, in a quantity which grows at the yield on the index-linked security. But this brings us face to face with the problem indicated above; as a matter of empirical fact, you can get carried out trading TIPS. A ten year bond will let you postpone your consumption for ten years, but your money is locked up in the meantime, and all sorts of things might change over the next ten years. You could get a bit more clever and buy TIPS strips, effectively "locking in" today's entire forward curve of expected inflation, but you're still not really protecting yourself in this way; you're closer than anything else on this list to locking in a guaranteed stream of consumption goods, but that's not the same as postponing your consumption in a risk-free way. It doesn't get you round the fact that in carrying out any such financial transaction, you're exchanging certain consumption for claims on deliveries in the future, during which time anything could happen. Or to put it more bluntly, when I swap an apple today for an apple tomorrow, I'm always at least taking the risk that I might be run over by a bus this afternoon, in which case I'll never get to eat that apple. An asset can't be risk-free in the sense one would need for its return to be the "price of postponing consumption" if it's illiquid.
So what are we left with? Well, basically, that staple of the investment portfolios of millenarians and loonies, canned food. You can guarantee consumption at a future date by storing canned food (by the way, a quick tip to "child-free" whiners; this is the only way in which you can fund your retirement in a way which doesn't make your moaning about having to pay taxes for the education of "other people's children" utterly hypocritical), and you can open the cans and eat it any time you like. But what's the rated of return on canned food? Probably negative if you consider that the quality of what you end up eating is lower than if you'd spent the same cash on fresh food today.
So, I'm turning this one over to the collective wisdom of my readers. Do please feel free to post schemes for securing risk-free exchange of today's consumption for consumption at some future date, which deliver a positive implied rate of return, and I'll report back in a couple of weeks (on the other hand, as a sort of Dadaist joke on the theme of this comment, maybe I won't). The best I can do so far is buying an apple tree which is already bearing fruit, but I can't help thinking this is some sort of cheat .....
1As is apparently customary in what I refuse to refer to as the "blogosphere", I would like to point out that the titular phrase was conceived of entirely by me, in a single act of creativity with no input from any outside source ever. It is also copyright me for ever, as are its component words, which nobody can now use for any purpose at all.
posted by the management 9/20/2002 06:26:00 AM
Book Review corner
I've just finished reading a book by the Australian economist Steve Keen, which I liked very much. It's lumbered with what I'd call an unnecessarily combative title ("Debunking Economics", ye gods and bollock harnesses), but it's bloody good on a number of technical points relevant to those parts of this weblog which I like to think of as "the ludicrous incoherent rants on poorly understood minutiae of what Piero Sraffa said in 1928". If I'd read it before subscribing to the "Post-Keynesian Thought" mailing list, rather than after, I think I could have saved myself many weeks of mute incomprehension.
I've also been reading Straw Dogs by John Gray, my old university prof. Looking back on my undergraduate education, it's quite easy to understand how I ended up with a somewhat bizarre Weltanschaung ("world-view" for the Readers' Digest set, use it in a sentence three times today and it'll be yours forever). I was educated by three fine men of British letters: John Gray, Galen Strawson and Don Hay. Gray is now the Professor of European Thought at the LSE, biographer of Hayek and Isaiah Berlin and most famous for False Dawn, an anti-globalisation diatribe which has as good a claim as any to have pioneered the current Klein/Monbiot/Hertz industry in such things. Galen Strawson's most famous work at the time (he's probably written a lot since, but I haven't kept up) was Freedom and Belief, a systematic destruction of the philosophical concept of free will and a proof that there can be no such thing as moral responsibility. Don Hay's best known work was the thumpingly good but painfully rigorous industrial economics textbook known to its sufferers as "Hay and Morris, but he also was (and remains) the doyen of Christian economics. So basically, from Gray I learned that everything's going to hell and there's nothing anyone could do about it, from Strawson I learned that that everything's going to hell and there's nobody you can blame for it, and from Hay I learned that I, personally, was going to hell and that if I didn't show up for Industrial Economics lectures he'd send me there. Actually that joke is a horrible calumny on Hay, who was an utterly nice man and never threatened me with hellfire, even in the face of severe provocation.
But anyway, enough of this sickening nostalgia. "Straw Dogs" is a great book. It's rather like the film of the same name in its bleak view of the prospects for humanity, although anyone hoping to see Dustin Hoffman going apeshit with a shotgun in Cornwall will be disappointed. Basically, John Gray asks the interesting question; what if we take seriously the fact that humanity is just one more type of animal on the face of the planet. The answer is that, we end up being brought face to face with the fact that an awful lot of things which over the years we have seen fit to kill each other over, end up looking pretty freaking silly.
The really good news for me is that Gray has finally found a prose style that works. I've been a fairly loyal buyer of his books over the years, and have always marvelled at how someone who gave such interesting lectures could write such constricted prose. I have a copy of his "Liberalisms" that is basically mint apart from the first fifteen pages, because I've never been able to read any further without wanting to drill a hole in my head to release some of the pressure. But he's been reading (and apparently, hanging round with) JG Ballard of late, and it shows. He's now setting out his philosophical arguments in simple declarative English sentences (harder than you'd think) and using imagery that contributes to his unique and bleakly pessimistic view of the world, rather than parodying it. As a work of philosophical literature, I think it's right up there with Marshall Berman's "All That Is Solid Melts Into Air", and I think I've said that about precisely zero books before.
So, for people who give a floating shit what I think about anything, there's a couple for you. Thanks to the reader (you know who you are) who recommended the Keen book.
posted by the management 9/20/2002 05:29:00 AM
Thursday, September 19, 2002
Cheap shots at war-libertarians? We got 'em!
In re: "nation building" and the idea that the real problem with the Arab world is that it doesn't have enough US puppet states, I adapt an old libertarian joke:
Q: What's the most frightening sentence in the Arabic language?
A: " ��� �� ������� ���������� ��� ��� �������� "
("We're from the US Government. We're here to help")
Translation provided by Ajeeb.com
posted by the management 9/19/2002 11:53:00 PM
Bubba the Dread
I'd like to rephrase my argument in favour of war in Iraq (that it is the only politically possible way of ending the horrendously cruel blockade of Iraq) in terms which won't convince anybody any more, but which might hopefully spoil the dinner of most of the other members of the pro-war camp.
The main argument of the warbloggers at the moment is that inspections won't work, can't work, can't be made to work. Because there are a million and one things that Saddam Hussein could do to foil, harry or impede the work of the inspectors, there is no way in which we can countenance taking seriously Iraq's offer to allow "unconditional" inspections. The only thing we can possibly do is invade, and there's an end on't.
Fair enough. But note that this argument could have been made at any time in the last ten years. So it does rather raise the following question:
If we really think that there is no possible inspection regime which would be any use at all, why the fuck have we been starving people to death for ten years in the pretence that there is????
Corollaries:
1) As Jude Wanniski regularly points out, the answer to the question, frequently asked over the last ten years "Why doesn't that evil megalomanic just let the inspectors back in if he cares about his people so much?" is almost certainly "Because he knew that some lugnut like you would make exactly the argument you've just made now that he has offered to let them back in".
2) Starting from this premise, it is not easy to avoid the conclusion that the policy of the United States of America over the last ten years has not been to get inspectors back in, but rather to attempt to starve the Iraqi people into revolution against Hussein. Starvation, in my opinion, ought to be classed as a weapon of mass destruction.
3) It further degrades the already debased currency of UN resolutions that they have been, in this case, clearly used in an entirely disingenuous manner.
Of course, this isn't Bush-bashing. Although the "inspections, schminspections" wing of the warblogger community are probably guilty of pretty serious bad faith (it's not possible to both hold the view that no inspection regime is satisfactory and maintain that the deaths from malnutrition and want of medical treatment which I call "starvation" for polemic purposes above were the fault of Saddam Hussein rather than the fault of the USA acting through the UN), bad faith is a much lesser crime than mass murder, and at least, in a sort of bumbling and insanely worrying way, Bush is holding out some hope for the end of the suffering. Nope, the policy of maintaining the death-grip of the blockade in bad faith, in the face of copious information about its murderous nature, and in the hope that it would eventually result in "regime change" without a fight, was the work for the most part of William Jefferson Clinton. Would it not be better for the soul of the Left to admit that the policy of starvation took place for the most part during the Clinton years and represents the logical outcome of the "triangulation" strategy (neither invasion nor accomodation, but rather a "third way") which marked out most of what Clinton did?
I fundamentally like Bill Clinton. That's why I'm right there on his side on most issues; whatever he does, he isn't an arsehole about it. And most of his opponents are such horrendous arseholes that one's every instinct cries out to support him. But after thinking through the argument above, I find it very hard to look at pictures of his big red old face without getting the same mental picture of heaps of emaciated bodies which always lingers as a retinal ghost image in the portraits of all the worst villains of the twentieth century.
edit: Forestalling the argument that "the reason people are starving in Iraq is that Saddam does this, that, the other instead of spending the money on food". It isn't so. Under the terms of the blockade, Iraq sells around $4bn of oil a year. The UN keeps 40% of this for its expenses and for reparations, leaving $2.6bn. That leaves around 36 cents per Iraqi per day, which is nowhere near enough to live on. And Iraq has next to no other exports but oil, and agriculture is pretty difficult to establish when you aren't allowed to buy fertiliser because it might be used as chemical weapons precursors. Furthermore, any argument based on how much money Iraq spends on its army overlooks the tiny technicality that every nation tends to increase military expenditure when they are under immediate threat of bloody war!. There is simply no way off the moral hook by twisting the facts in this manner.
other edit: Just realised that, of course, all references to "USA" should be "USA and UK" above, but can't be bothered to change them individually. I'm part of the collective guilt on this one too. The French, bless 'em, aren't.
posted by the management 9/19/2002 10:38:00 AM
Wednesday, September 18, 2002
The Trouble With Oligarchs
An answer, finally, to a question which has been bugging me for ages. Conversations between me and Harvard Institute types about the disastrous "shock therapy" experiment in Russia where an attempt to build capitalism in one country ended up killing a fair chunk of the population have always tended to go like this:
Me: What the hell happened? How did you fuck up Russia so badly? People call Art Laffer a crap economist, but he never starved a million people to death! What were you guys smoking?
Harvard Institute type: Oh it was terribly sad. Our policy mix was about right, but, unfortunately, the whole thing was derailed by the botched privatisation program
Me: I'll say it was fucking botched! GDP fell by 42%! Life expectancy fell by seven years! I simply do not believe that a freaking privatisation program, a fairly mild supply-side reform, no matter how badly designed, could have that kind of immediate and catastrophic macroeconomic effect!
Usher: Excuse me sir, would you mind lowering your voice and minding your language? Professor Shleifer is about to make his speech
HI Type:Well the problem is that because the privatisation program was handled badly, the national assets ended up in the hands of a small group of oligarchs.
Me: So fucking what? They were in the hands of a small group of oligarchs before the privatisation! In any case, how does this affect output?! When people find out that their employer has been taken over, they might slack off a little, but they don't suddenly decide to down tools, go home and starve to fucking death! There's got to be more to it than that!
Somewhat more burly usher: Excuse me sir, would you mind stepping outside ...?
Which has always been the kernel of my argument. Terribly unfair and corrupt or not, handing over ownership of a factory from this bunch of gangsters to that bunch of gangsters doesn't stop the wheels turning. Surely to goodness, the Harvard Institute must have made some other criminally stupid mistake to do so much macro-level damage in such a short time?
The answer to which was, "yes and no". Fundamentally, what we have to realise that, at an economic rather than a political level, what's bad about oligarchs is a monetary perniciousness rather than a moral one. The fact that they're crooks is economically neutral. However, the fact that they know they're crooks, and they suspect that they're going to get found out soon, can have disastrous effects. Think about it this way:
A party apparatchik can be a pretty venial and horrible person. But there's only so much self-dealing he can do for himself under a communist system. He can get a bloody fine dacha, the best food and drink, good clothes and a couple of mistresses and that's it. Don't get me wrong; it was possible under the Soviet system to live a lifestyle not unlike that of a Western millionaire if you played the game right. Let's assume that the actual consumption of the oligarch class was unchanged post privatisation.
The trouble with a capitalist robber-baron as opposed to a corrupt commissar is that because he's a capitalist, he is concerned with accumulation as well as consumption. Specifically, his goal is not just to live like a king, but to take as much of the cash flow of his factories as he can, convert it into dollars and stash it somewhere outside Russia where the people he's meant to be answerable to can't find it. In the balance of payments, this shows up as a negative item on the capital account (ie, by depositing the money in a foreign account, he is increasing the claims of Russians on institutions outside Russia). When you have the entire productive industry of the country owned by people like this, then the capital outflows can be pretty massive.
Unfortunately, for a country in Russia's stage of development, you would normally want to see capital inflows, not outflows, which was rather the problem. Billions of dollars in aid and investment went into Russia between 1990 and 1998, but most of it just ended up providing the liquidity for capital flight. And of course, as one learns in the dull national accounts lecture in the first week of your macroeconomics course, a negative item on the capital account has to have as a counterpart a positive item on the current account; to accomodate the capital flight, Russia had to run a current account surplus. Which is pretty tricky; given that Russian exports to the outside world were more or less fixed in the short term, the only way to create the surplus was through import reduction or "domestic demand compression". Which is exactly what happened; Russia experienced a huge and horrendous depression precisely because an item which is usually small enough to be forgotten about (the drain on domestic liquidity brought about by capital flight on the part of criminals) became significant enough to be large relative to the domestic money supply. So the *really* stupid policy of the Harvard Institute was to impose the open foreign exchange and capital markets which made the capital flight possible.
Interestingly, there is a corollary to this "monetary theory of kleptocracy". Note that most of the bad effects of the kleptocrats took place because they converted their (local currency) profits of theft into dollars, draining the economy of hard currency. Because of this, we can credibly hypothesise that there is one case in which you could hand the entire economy over to robber barons and it wouldn't really matter at all. That would be the case in which the local currency is the global reserve currency, so that the kleptocrats are happy holding their wealth in local currency. In other words, the one country in the world which has literally nothing to fear from becoming a gangster state is the United States of America!
posted by the management 9/18/2002 01:08:00 PM
The Nukes of Yesteryear
I read in my evening newspaper that Saddam is definitely on the threshold of developing suitcase nukes, and that all he currently lacks is the necessary uranium ... takes me back to my own schooldays. Readers may be interested or reassured to know that, based on my own adolescent attempts to build a nuclear device in my parents' shed, the "getting hold of uranium" stage was the difficult bit for me too.
posted by the management 9/18/2002 12:22:00 PM
Foreign Policy Update
As mentioned in a previous post, I'm in favour of war with Iraq, simply because I didn't see any other politically possible way of stopping the humanitarian disaster of our current blockade of Iraq. But obviously, war is not something we should go into lightly, and the current offer from Saddam to allow the inspectors back in has to be taken seriously by anyone with the best interests of humanity at heart. If the UN inspectors can go in, and if they can get any way along the way toward certifying compliance with the resolutions, then there might be a political solution to the problem, allowing an end to our horrendously cruel blockade in a manner which saves face, doesn't require a whole load of military casualties and, importantly, doesn't put me at risk of sucking in an anthrax spore put in my breakfast cereal either by Saddam, or by some local nutter wanting to put the blame on him.
So, I propose that we abandon the war debate for the meantime and all throw our support behind the proposal that there should be a short hiatus in our war preparations. For the peace side; hey, jaw-jaw is better than war-war. For the War Party; hey we're only proposing a short break, during which time we can start tightening domestic security. It doesn't have to be a long hiatus; not even two months. I'm proposing that we should continue negotiations on UN inspections for precisely seven weeks, starting today, and if there isn't material progress, we send the troops in on November 6th.
Who could possibly object to that?
posted by the management 9/18/2002 02:32:00 AM
Tuesday, September 17, 2002
Deregulation saves the nation ...
Lots of stuff in the blatts about the unique advantages of the "deregulated", "open" even, ye gods and bum pills, "free" financial markets of the USA, and how they represent a crucial advantage of that great nation in coping with trouble. I don't propose to get into arguments about whether American markets are better than anyone else's, because there's a fact of the matter; when it comes to markets, bigger is better, and American markets are the biggest, so they're the best. But if there's a big boat full of gravy out there for anyone with a free and deregulated financial sector, then speaking for my European brethren, I gotta get me some of that. With this in mind, D-Squared Digest would like to put forward the following urgent four-point Deregulatory Plan to bring us into line with the land of the free:
- In order to help us come into line with "US equity markets, the freest in the world", Europe should immediately impose numerous restrictions on short selling (such as the NYSE uptick rule), require that derivatives be traded on different exchanges from the underlying and introduce "circuit breakers" halting trading if the market falls too far.
- In order to reduce "European governments' use of the banking system to help promote social goals", Europe should immediately abandon its strategy of using state-owned subsidised banks, and should instead pass an equivalent of the Community Reinvestment Act, regulating and pre-empting private companies' decisions about who they want to lend to.
- In order to ensure that we no longer have to suffer "failing companies propped up because of their political importance", Europe should immediately fall into line with the USA by removing the State Aids directive which forbids government bailouts and change its bankruptcy code to make it as easy for insolvent debtors to continue trading as it is under Chapter 11.
- In order to reduce "the plethora of red tape which stifles innovation", all European states should immediately establish three different types of bank, each with a different regulator, along the lines of the OCC, Fed and the individual state banking commissions, and no very obvious way for anyone to tell which type of bank is which. Securities and derivatives regulators will have to be split in each country, and the Banking Co-ordination Directive which allows an institution chartered in one Member State to do business across the EU will need to be repealed. Foreign banks will obviously need to be subjected to yet a further entirely different system of regulation.
Only in this way can the backward, stagnant and sclerotic regulatory systems of Europe approach the model of clarity and nonintervention with which the US provides us. Perhaps one day, European financial institutions will be able to employ as few compliance officers and lawyers as their American counterparts!
posted by the management 9/17/2002 03:52:00 AM
Monday, September 16, 2002
Thort for the day
I was going to title this "Hello, Hello, It's Good to Be Back", but then I remembered ....
OK, a thought that struck me while on holiday, in the form of three questions;
- Hands up if you believe that Benjamin Franklin was talking sense when he said "They that can give up essential liberty to purchase a little temporary safety deserve neither liberty or safety" ....
- Hands up if you believe that African governments are doing something wrong or stupid in rejecting genetically modified corn given as food aid.
- Now ... hands up again if you still think agree that "that can give up essential liberty to purchase a little temporary safety deserve neither liberty or safety"
And the beauty of it is, that nobody will be able to argue with me 'cos comments still don't work.
More later ...
posted by the management 9/16/2002 07:23:00 AM
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