John Quiggin

I haven’t yet posted on the Queensland election campaign, and just as I was thinking about it I heard the tragic news that Lawrence Springborg has had to withdraw from the campaign due to sudden death of his wife’s father. I’d like to express my sympathy to Mr Springborg and his family, which I’m sure will be shared by readers.

This NYT piece by Adam Cohen starts with the observation that Americans are feeling pessimistic about the war in Iraq, Hurricane Katrina and so on, then jumps to a recent work on philosophical pessimism by Joshua Dienstag, whose basic argument is summarised in this sample chapter. As Cohen says, pessimism in this sense is not a gloomy disposition, but a worldview that “simply doubts the most basic liberal principle: that applying human reasoning to the world’s problems will have a positive effect.’ Cohen concludes “Part of Mr. Bush’s legacy may well be that he robbed America of its optimism “.

But if optimism holds that applying reasoned analysis will have a positive effect, the experience of the Bush Administration merely illustrates the point that the converse is also true.
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I happened to notice that the iTunes music store was selling a new album by Paris Hilton, which had a two-star rating. This seemed like an interesting mean value, so I thought I’d see how it was derived, and took a look at some of the comments. The modal response was a one-star rating, often accompanied by a demand that iTunes introduce fractional, zero or negative stars to its system.

On the other hand, some listeners made a convincing case for five stars. For example, one headed Genius. pure and simple reads

By subverting modern pop music and turning every soul crushing cliche in modern music to tap-like ’11′ proportions, Paris has created 3:57 of towering avant garde… An almost coma-inducing tour de force, which ranks with Lou Reed’s ‘Meta Machine Music’ in the unlistenable stakes. Bravo, Maestro!

Even on the limited free sample available from iTunes, I think this rave review is warranted.

Googling around in connection with my review of Unspeak, I came across an old LanguageLog post on The apparent deceptiveness of the world, which cites the paradoxical statement

Appearances are not deceptive; it only seems as if they are.

and invites Brian Weatherson (who’s now one of the crew at Crooked Timber) to analyse it, saying

Clearly, if this is true, then it has to be false, and if false, it must be true. Yet it is not a standard liar-paradox sentence like as in classic liar sentences like This statement is false, or Everything I tell you is a lie, including this. It does not mention truth or falsity, or refer to itself. It is a metaphysical claim, as far as I can see. It speaks not about language or truth but about the nature of reality. It says (contrary to the old proverb) that reality does not present itself in a way that deceives our senses, and any perception we may have to the contrary is incorrect.

I think we can extract a coherent claim with the aid of Hamlet’s observation “For there is nothing either good or bad, but thinking makes it so”. I’d read the statement as saying something like “First appearances are not deceptive; it’s thinking about them that leads you astray”. While this is obviously false as a general statement, I think direct perceptions are usually closer to the mark than the results of the kinds of analysis (Freudianism, large parts of Marxism, a lot of public choice theory) that purports to strip away surface appearances and reveal the underlying truth.

I spent the weekend at Hayman Island, where I gave a talk on water to a conference run by the Australian Davos Connection, an offshoot of the Davos World Economic Forum, with quite a high-powered set of political and finance people in attendance (some are mentioned here). It’s all very low-profile and run on Chatham House rules (no names, no pack drill), so you’ll all have to imagine the fascinating gossip I could pass on if I wasn’t sworn to silence. Fortunately, there’s no problem talking about the substance of what was said.
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It’s time, once again for the Monday Message Board. As usual, civilised discussion and absolutely no coarse language, please.

Andrew Leigh points to ABS data showing increasing inequality in both wages and disposable income since the mid-1990s. This is scarcely surprising for a number of reasons. First, our poor performance in education means that the supply of educated workers has not kept up with the long-run trend increase in relative demand for such workers, so the equilibrium wage differential has increased. Second, IR reforms over the last decade and the decline in union membership would both be expected to increase wage inequality. Finally, whereas tax-welfare policy under the Hawke-Keating government generally offset the effects of increasing inequality in market incomes, the reverse has been true under Howard.

Looking at overseas experience, particularly the US, UK and NZ we can expect a whole lot more inequality once Workchoices takes effect.

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

My draft review of Steven Poole’s Unspeak is over the fold. Comments much appreciated.
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There’s been a lot of discussion about claims that world oil output is going to reach a peak some time soon. If you look at the recent numbers, there’s a pretty good case to be made that world all output has already reached its peak at about 73 million barrels a day, a level reached in mid-2004, and sustained for the past two years.

Now there are lots of local factors that explain weak output in particular countries. Still, if the claims made by those who think oil output can keep on growing were correct, I would have expected the massive increase in prices (from a brief low of $10/barrel and a medium-term price of $20/barrel in the late 1990s to $75/barrel today) to produce a substantial expansion in supply.

This argument is pretty robust to whether oil producers believe that there is plenty of oil (implying that prices will come down again) or not. If prices are going to come down, then there’s a strong incentive to pump more in the short term, use secondary recovery from depleted wells and so on. If prices are going to stay high, there’s a strong incentive to bring large new fields online, even if they are in high cost locations. As far as I can see, neither of these things is happening.

Supposing that oil output has peaked, the obvious point to be made is that Peak Oil isn’t so bad. Sales of Hummers are plummeting, apparently, and lots more people are using buses (at least in Brisbane). And of course, the less oil there is to burn, the easier it will be to stabilise CO2 emissions (though we can’t just rely on Peak Oil – apart from anything else, there’s almost unlimited coal in the ground, far more than we can burn without frying the planet in the process).

Even if supplies have peaked (or, more plausibly, flattened out at the top of the curve), I doubt that prices will go much higher than this, though $100/barrel is certainly possible. If current prices are sustained, a lot of alternatives will become cost-competitive, as already seems to be happening with biofuels in the US. More importantly, demand is bound to respond more than it already has.
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Reader Paul Williams, who works in TAFE policy in NSW, points me to this interesting report on the economic value of TAFE, undertaken by Allen Consulting, who do the whole thing with a general equilibrium model and estimate the NPV of the TAFE sector at $196 billion.

The report has had some coverage in the media, but there’s a pretty good case to be made that this kind of thing could be better disseminated through blogs, where there’s time to debate the issues. Then again, you could argue that after 30 comments we’ll all be debating the influence of climate on the civil war in Iraq.

You can read it here

Also, in today’s (Wednesday) Fin, Alan Mitchell has an excellent piece lamenting Australia’s lousy record in building human capital, something that isn’t helped when the PM encourages kids to drop out of school at the end of Year 10 in the hope (unlikely, these days, without the kinds of skills obtained by persevering to Year 12) of getting and completing an apprenticeship.

It’s time, once again for the Monday Message Board. As usual, civilised discussion and absolutely no coarse language, please.

Daniel Byman and Kenneth Pollack start a lengthy Washington Post piece by observing

The debate is over: By any definition, Iraq is in a state of civil war.

and their assessment only gets gloomier from there on in, pointing to the disaster as a source of further regional conflict, a recruiting poster and training ground for terrorists, massive flows of refugees and so on. They have essentially nothing positive to suggest except for the observation (for which General Shinseki got fired before the war) that

Considering Iraq’s much larger population, it probably would require 450,000 troops to quash an all-out civil war there. Such an effort would require a commitment of enormous military and economic resources, far in excess of what the United States has already put forth.

Since the commitment of 450 000 troops is even less likely now than it was in 2003, the conclusion is, in effect, that the situation is hopeless.

We’re well past the point where admissions of error will do any good. Still, I’m stunned that Pollack could write

How Iraq got to this point is now an issue for historians (and perhaps for voters in 2008); what matters today is how to move forward

This was so brazen that I thought I must have got him confused with someone else. But no, it’s the same Kenneth Pollack who wrote The Threatening Storm: The Case for Invading Iraq

Lots of people like goats. So a goat is a great gift idea, but as with other live gifts, there’s the problem of looking after it. Oxfam unwrapped solves the problem. They’ll give a goat, in the name of your gift recipient, to a poor community. At $39, tax deductible it’s a great choice. And there are other choices, including chickens, farmer training and food.
The big ticket gift is a rice bank for $12488. Maybe we could manage this for our next appeal. In the meantime, why not give a goat.

The discussion of this post brought up a question I’ve been worrying about for quite a while. Given the catastrophe in Iraq (and the deteriorating situation in Afghanistan) should those of us who supported intervention in Kosovo revise our position?

While I still think the likelihood of another round of genocidal ethnic cleansing justified action in Kosovo (and makes a bigger effort in Darfur morally obligatory at present), I think some aspects of the Kosovo action were mistakes that sowed the seeds of future disaster.

My view at the time was that the failure to get UNSC approval wasn’t that important, since there was a clear consensus in favour of intervention and the only problem was that the Russians didn’t want to be forced to state a public position.

Now I think that was wrong and the effort should have been made to secure a UNSC resolution, making whatever concessions were needed to get Russia not to veto it. The problem wasn’t so much the breach of legality in this case, as the precedent it set, which was expanded beyond all recognition by Bush and Blair in Iraq.

I also think (and thought at the time) that the bombing of Belgrade crossed the line from striking military targets to terrorisation, most obviously with the bombing of the TV station. This precedent was used recently in Lebanon. I plan more on this general issue soon.

My piece in yesterday’s Fin (over the fold) was about the failure of Telstra (or, more fairly, telecommunications policy) to give us even late-20th century standards of broadband service. Meanwhile Joshua Gans looks at how Telstra talks to regulators when it’s the underdog.
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Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

Since Daniel at CT has identified me as abandoning the “Anti-this war now” viewpoint, and since I’m increasingly in agreement with Jim Henley’s Anti-Most Wars Most of the Time position, I thought I’d try to restate my version of ATWN as it applies to Iraq. I haven’t managed to work it all out, so as with Daniel I’d be grateful for suggestions.
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Today was People’s Day at the Ekka, and it seemed like all of Brisbane was there, except that we’d already seen half of them, dressed to the nines and headed for the races, on the train on the way there (and saw them again, much the worse for wear in many cases, on the way home).

On the TV news the head organiser was interviewed and said (imperfect recollection), ‘lots of people say the Ekka never changes, but actually there are lots of great innovations … but really it’s the same as ever’.

Put me in the ‘never changes and never should’ camp. I went as usual with my son, and, except that we missed the Silver Spike tracklaying competition, and tried out the Cliffhanger (you lie prone and it whirls around – well worth a go), it was exactly the same as last year – we watched the woodchopping and the stage hypnotist, lost our money on the laughing clowns and shooting gallery, rode the dodgems, Ferris wheel and Gravitron, checked out the cattle in the main arena, bought a showbag and reminisced about how they used to be really good value, then crammed onto the train for the trip home. Even this blog post is the same as last year’s.

Mercifully, the ceasefire in Lebanon appears to be holding, but the outlook for the future of Lebanon, Israel and the region as a whole is massively worse than before the fighting began.

The outcome has been entirely typical of war. Both sides are claiming victory; advocates of war on both sides are pointing to the crimes committed by the other side, in support of their case; nothing will bring the dead back to life.

The actions of Hezbollah have been criminal from the outset, starting with a trivial pretext for its initial attack and then using indiscriminate rocket attacks as its main method of waging war. Hezbollah is morally responsible for all the death and destruction that predictably ensued from its actions.

But, as is now becoming clear, the Israeli government and, even more its backers within the US Administration were eager for a pretext to destroy Hezbollah, and were willing to inflict massive death and destruction on ordinary Lebanese people in the (futile) hope achieving this goal. This policy was both wrong and, as events have shown, counterproductive.

Again, the broader lesson is that war (including insurgency, ‘armed struggle’ and so on) as an instrument of policy is almost always disastrous for those who adopt it. Self-defence is necessary and justified, but should be limited as far as possible to restoring the status quo ante, a point explicitly rejected in the Barkey article cited above.

I’m working on a summary of the evidence on economic effects of the size of government. I’ll probably cite the usual suspects such as Barro and DeLong in due course, but I’d be interested in comments, particularly pointing to evidence outside the usual pattern of growth regressions and so on.
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The recent news from the UK suggests that the threat of terrorist attacks is going to be with us for a fair while to come. Still, as a relatively frequent air traveller, I can’t say I’m too concerned by the news. The terrorists have managed to generate a barely observable increase in my (and everyone else’s) risk of death while travelling, and have now achieved a further marginal increase in the associated stress and inconvenience.

What scares me is the possibility that terrorists could get hold of nuclear weapons. Even a small atomic bomb could be a hundred times worse than all the attacks of recent years put together. Yet it doesn’t seem as if the threat is getting anything like the resources it merits. Of course, the biggest danger is that the bombs already made by Pakistan will get into the hands of someone linked to Al Qaeda, of whom there are plenty still in positions of power and could be more if Musharraf goes. There’s no easy way to reduce this threat. But a modest expenditure could help to buy up the enriched uranium, weapons systems and disgruntled scientists still floating around the former Soviet Union. I’d be a lot happier if I saw some evidence of this actually happening.

My mobile phone buzzed a few minutes ago with an SMS message from reader Mike Smith, advising that a state election has been called for Saturday 9 September. This is, I think, the first time I’ve received actual news by text message.

I’m not great on the instant analysis thing, but my off-the-cuff prediction is a narrow win for Labor. I heard on the news that Centrebet were offering 8/1 for bets on the Coalition, which seemed long enough odds for a flutter, but by the time I checked in they’d shortened to 6/1. Meanwhile Labor has ‘blown out’ from 20/1 on to 10/1 on. This still seems to me to underestimate the odds of Labor losing, given that the opinion polls are level pegging, but the margin isn’t enough to induce me to back my judgement with cash.

One question that arises is whether a Coalition government would be led by the Liberals or the Nationals. I caught the tail end of an interview with Springborg in which he assured voters that he would be Premier in the event of a Coalition win, but I don’t know if that was based on an agreement with the Libs (possibly unenforcable) or his confidence of winning more seats (dubious based on a quick scan of the marginals).

I’ve expressed the view that we’ll never see another National government and I still think that’s highly probable. The best chance for the Coalition is that the Liberals get more votes and seats than the Nats this time around, and then become a plausible contender next time around.

The withdrawal of the Howard government’s legislation aimed at recreating offshore prison camps for asylum seekers is good news all round. The Liberal MPs who crossed the floor to vote against the bill (along with Family First’s Steve Fielding who indicated a vote against and Barnaby Joyce who threatened to abstain) have helped to revive the idea of Parliament as a place where laws are decided and debated rather than a rubber-stamp for the executive. Substantively, the failure of the bill reduces the likelihood of children being kept in detention centres again, though this is still, I think, possible under existing laws.

Despite the usual posturing, the outcome is not a bad one for Howard, as was shown by the rapidity with which he dropped the bill. There are no more votes to be had from anti-refugee demagogery, and the government was happy to back away from its past policies last year, and return to a process in which we implemented, at least in part, our legal obligations to deal fairly with asylum seekers. The problem was the inconsistency between the government’s rhetoric and actions in 2001, dealing with refugess from Iraq and Afghanistan, and the admission last year of refugees from West Papua (note to those who seek to use non-words like “illegals” in this context – those I refer to have had their refugee status confirmed by the standard legal process).

Not surprisingly, the Indonesians were upset by this inconsistency, which implied that the position of West Papuans was worse than that of people escaping from the Taliban or Saddam Hussein, so the government was pushed into yet another reversal. But now, Howard can go the Indonesians and say he has done his best and that the problem is with the Parliament. Not surprisingly, Downer has already done this.

As I mentioned, i’ll be at the IAAE Conference today. I’m convening a symposium on Risk and Australian Agricultural Policy which will be at 3:15. I’ll be speaking, along with Chris O’Donnell and Alastair Watson.

It’s time, once again for the Monday Message Board. As usual, civilised discussion and absolutely no coarse language, please.

Reader Tom Stafford writes to publicise a protest against Elsevier:

Reed Elsevier is a publishing company with an arms trade problem. While the bulk of their business is in scientific, medical and educational publishing, they also organise arms fairs around the world. The aim of this website is to mobilise the academic community that writes and reads Reed Elsevier’s journals to persuade them to stop organising arms fairs. More details and petition here

I’ve been thinking about this on and off for a while, trying to work out what course of action is most effective in cases like this. Suggestions are welcome.

The next in the BrisScience lecture series is on tomorrow (Monday) night, at City Hall, 6pm for 6:30. Continuing to diversify the range of topics, the speaker is Margaret Wertheim, on the topic ” Space and Spirit: Why Science and Religion Together are Driving us Crazy”. As the extract over the page suggests, Wertheim thinks that we have a fundamental pyschological need for a reconcilation of science and religion.

I’m not so sure about this. One of the most striking features of the late 20th century was the collapse of active religious belief in most of the developed world, with the glaring exception of the United States. This didn’t result in any direct sense from scientific discoveries about the universe. And, surprisingly, it didn’t seem to produce any big changes in behavior (there have been changes in sexual mores, but these have been just as noticeable in the US as elsewhere) or any obvious rise in cosmic angst. You can find some statistical differences between believers and non-believers, and between those who regularly attend religious services and those who don’t, but they are a lot smaller than much of the discussion of this topic would suggest.

Unfortunately, I won’t be able to make it, as I’ll be presenting at the IAAE Conference in the Gold Coast so maybe some Brisbane-based reader would like to put in a brief report on proceedings.
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I spent yesterday at the Gold Coast, at a pre-conference Workshop on Water leading up to the International Association of Agricultural Economics Conference which starts today.

My presentation gave some simulation results on the impact of climate change. It’s still preliminary, but for those interested here is the presentation.

There’s a big area set aside for WiFi users at the Conference, including at least one possible liveblogger, who has already chided me for my failure to report promptly. The competition in econoblogging is definitely getting keener, in all senses of the term.

The fight over the economics of protection has been going on, with Harry Clarke at Kalimna saying

The argument that Nicholas Gruen has propounded, and which John Quiggin seems to have supported, that low levels of tariff protection are justified by the existence of market power in export markets, is just wrong.

I don’t think Harry’s argument actually proves his claims – he just shows that the simple version of this argument is too simple, which is true of all simple arguments, including simple arguments for free trade.

My view, for what it’s worth, is that any terms of trade benefit from protecting the industry is likely to be negligibly small and that the standard counterarguments about retaliation make it a bad idea to try to impose optimal tariffs to extract such benefits. But the allocative efficiency benefits of reducing small tariffs.

But if neither of these effects is significant what are we arguing about? A couple of things.
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