The Australian stock market opened lower this morning on the back of Rupert Murdoch’s speech to the Lowy Institute last night. A senior analyst, interviewed by this correspondent attributed the fall in the Australian share price to the “transparent and misguided attempt at national flattery” when Mr. Murdoch predicted that Australia could be better than Singapore, Hong Kong and Taiwan. “ We already are”, said the analyst, “and markets don’t like to hear of things going backward”.

The apparent sycophancy of Treasurer Joe Hockey was noted, with questions also being asked about whether Mr. Murdoch had the necessary subtlety in his old age to continue to force the Australian government to bend to his will without making his interventions embarrassingly obvious, and hence undermine his controlling stake.

Mr. Murdoch’s revelation that he wears an electronic bracelet that monitors his lunch and his lunchbox was described as “just plain weird” by the analyst, and wondered only half-jokingly “if it was time to send the doddery old bugger off to a home”.

What should Australia do about a slowly warming world? Join a small group of European countries who have more permits to sell than their own industry can manage to use? Join hands with a coalition of the desperate in enacting one of the front-runner geo-engineering solutions, such as emitting tiny reflective particles high in the atmosphere in the hope of reflecting enough sunlight? Or just do nothing for the time being, perhaps researching this or that option and simply slowly adapting to the changes as they happen?

A world-wide Emission Trading Scheme that truly measures all the relevant forms of emissions and enforces a price high enough to truly bring back the stock of CO2 in the atmosphere to pre-industrial revolution levels is not on the cards. It would require a political commitment that lasts for decades, if not hundreds of years. It by necessity should involve all major countries, lest one would start to free-ride on the others and attract all the industry that is emission-intensive. It should stand firm globally, election after election in each of the countries. Within countries, the political will would have to be strong enough to overcome the temptation of provinces and councils to free-ride. To get the kind of reduction of carbon usage one would need, all things involving fossil fuels or equivalents in terms of emissions and uses (such as cooking oil!) would have to become prohibitively expensive: easily 100 to even 1000 dollars per litre at present estimates of demand elasticity. Imagine policing that in every home everywhere in the world!

In short, there would have to be a world-wide consensus on a level of emissions, a universal monitoring agency, and an international enforcement mechanism with enormous coercive powers. And don’t underestimate the needed coercive powers: if one is to keep 200 countries in line for thousands of election cycles, one really needs to be able to threaten with nothing less than a take-over. Whoever polices this scheme would thus need the power to invade large countries and to sanction all politicians at any level who might subvert the process for local gain.

If you reflect on this minimum package an ETS needs to have to ‘do the job’, you quickly realise it is a fantasy. An ETS on this scale only makes sense in an imaginary world where measurement and enforcement are easy, and political will indeed can be kept up at a worldwide level for generations. It is the sort of fantasy that underlay the communist project and, once again, reality will prove economists like Von Mises right: there are limits to what can be monitored and enforced. Indeed, I find it a little sad that so many economists and scientists allow themselves to be seduced by such command-and-control fantasies. I am yet to meet a senior politician who is naive enough to believe he could organise such a thing. Of course politicians play along -‘we, the population’ demand that they play along – but meanwhile they are simply building more coal-fired power stations, signing more coal export permits, and putting up import barriers against cheap Chinese solar panels.

What about geo-engineering, then? Continue reading →

I remember the great bushfire in Canberra of 2003. I had only arrived with the family a week before and had just rented a nice house near the top of Mt Cook, right in the path of an enormous bushfire that ended up destroying hundreds of homes.

The heat of that day was immense: 40 degrees and strong winds. Activity was similarly frantic. Warnings on the radio of how the seemingly impossible was truly happening: fires that broke all containment lines were converging on the capital. Barbecues got cancelled as everyone returned home to prepare: people feverishly cleaning out the gutters of their house to remove anything that would easily combust; people filling up their bathtubs to be able to quickly immerse themselves if needed; the ban on using hose-pipes suddenly being lifted as the importance of water conservation gave way to survival. Our neighbour, whom we never talked to before, or afterwards, was suddenly very chummy in the face of this imminent joint danger. Indeed, there was a palpable buzz about Canberra as people went through a shared emergency.

Well do I remember standing on top of Mt Cook, seeing the fires break more containment lines on their way to our neighbourhood. In the distance, we could see huge fire-arcs of hundreds of meters, via which whole trees, full of igniting oils, were whirled into the Southern suburbs, causing immense damage to people and property. One had to be in awe of that kind of destructive force, which simply seemed too great for humans to meaningfully oppose. One suddenly felt a bit silly, holding two hosepipes in one’s hand waiting for these huge fires to come! Luckily for my neighbourhood, the wind shifted just as the fires were about to hit us, with the cooler air streaming from the opposite direction effectively ending the tragedy. For months afterwards, family back in the Netherlands and the UK would ask whether there were any houses left in Canberra and whether we had been lucky. We had been.

Yesterday and today, there are more large bushfires running wild in Australia and fears of a repeat of the 2003 fires abound. Let us hope things don’t get that bad.

Putting on my social scientist hat, I can offer the following perspectives on these bushfires: Continue reading →

Eugenics got a bad name after the second world war. It got associated with pseudo-scientific theories under which people at the bottom of the societal ladder were branded as hopelessly deficient for supposedly inalterable biological reasons. Societies’ less successful were, quite literally, seen as ‘untermensch’ (under-people) and the ‘science’ of heritable poverty, height, and intelligence was used in the public campaigns of the nazis and others to stigmatise gypsies, jews, homosexuals, vagabonds, and others as being biologically deficient and hence a kind of ‘disease’ for which the only ‘cure’ was annihilation or selective breeding.

Modern behavioural geneticists of course are not like the old eugenicists. They are ‘merely’ looking at the relation between genetic proximity between people and how much their height, their intelligence, their mental disorders, their criminal behaviour, and their body size resemble each other. They talk of alleles, single nucleotide polymorphisms, linkage disequilibrium, heritability, phenotypes and CNVs, not the inherent inferiority of this recognisable group of people over that group. They do not advocate selective breeding, unless it is of mice or plants of course. One cannot find a single paper by behavioural geneticists in Nature or Science, where they appear often, that calls for genetic tests to be used for potential migrants or selective baby-bonuses.

And yet, I find this field somewhat creepy in its treatment of social processes. The same techniques and language is used to ‘track genetic diseases’ in plants as is used to track ‘genetic causes of behaviour’. The same techniques of breeding ‘mice with particular traits’ is advocated to ‘find’ the biological basis of what are essentially social outcomes . The same old penchant of looking for supposedly inalienable biological causes of what are changing social constructs is on display.

The literature I am talking about is vast, and the interested reader is invited to look at some reviews of it here (written by insiders of this literature), or else by psychologists here. There is little point in regurgitating those reviews, which are both very informative and open-minded. What I will do below is say why I think you don’t actually have to worry about this crowd: yes, these geneticists are indeed looking for the genetic recipe of the successful human, but their quest is, at the moment, going nowhere. Continue reading →

For 14 months, Australia has had an electronic national health register. It has almost nothing in it, but the hope is that in years to come (when lots of people have registered) it will start to have all the information on someone’s health that floats around in the health industry. This includes discharge summaries, the history of medicine use, databases on allergies and conditions, payment histories, dental records, childhood illnesses, vaccination history, and treatment plans.

This health register was initially championed by Tony Abbott when his party was last in power and he was the health minister, so now that he is the Prime Minister, its future looks safe for the next few years at least. Let me, as an interested but only average-informed health watcher (so don’t kill me if I make a faux-pas below!), talk through the possibilities of this health register, the failures to have health registers in many countries, and the wondrous ways in which the Australian variety seems to have benefited and thrived from a lack of foresight, a lack of consultation, a lack of expertise, and a lack of money. It is somewhat unusual and incredible from the point of view of normal economic thinking about reform, but we seem to have a policy area here in which it seems an advantage to bumble along in the dark, rather than be well-prepared beforehand.

But let us start with what we ultimately might want out of such a register.

The long-term usefulness of a national registry is enormous. Instead of each hospital ward and each GP having their own separate 20 datasets each on patients, staff, and payments, you would have just one. Doctors and nurses would type their diagnoses and delivered treatment onto an iPad, send it to the database and the whole rigmarole of insurance, subsidies, and passing on information happens automatically. With national-wide access, health professionals everywhere would know all they need to know about each patient without having to attempt to contact the 50 other places that person has been in so far. Even within hospitals and nursing homes there would no longer be a need for staff to meet and compare notes on patients and residents. Patients wouldn’t have to constantly fill out huge forms, nor worry that the allergy they forgot to mention this time leads to them being prescribed the wrong medicine. Essentially this means fewer mistakes and fewer forms.

Down the road, an electronic health register would become the logical vehicle for all monetary transactions in the health system. GPs and hospitals would be paid according to continuously updated health plans devised by diagnosticians including GPs and Artificial Intelligence diagnostic tools; inventory and usage would be deduced from this register; salary and accreditation of health workers would go via it; taxes and subsidies would flow within it. Effectively, a national electronic register could be the roadmap and marketplace used by all health professionals for all interactions with patients and others in health land. Continue reading →