Friday, December 31, 2010

Repugnance

I described nine taboo topics on an earlier blog post, looking at ideas about society that would be difficult to discuss in public because they offend mainstream values - like the claim that greater access to pornography actually reduces sexual violence.

So I was interested to see the Freakonomics Blog exploring "repugnant ideas". Steve Levitt says:

Economists are pretty much immune to repugnance. Either by birth or by training, economists have their mind open, or skewed in just such a way that instead of thinking about something in terms whether something it’s right or wrong, they think about it in terms of whether it’s efficient whether it makes sense…and many times the things that are most repugnant are the things that are quite efficient — but for other reasons, subtle reasons sometimes, are completely and utterly unacceptable.

Wednesday, December 29, 2010

Coastlines, climate and coin

One approach to explaining why different regions have different levels of wealth looks at geographical advantages. The Gapminder Foundation explores this by plotting the wealth of every country in the world on a chart along with latitude and coloured by posession of coastline/landlocked. They find that there are no landlocked equatorial regions with high incomes: almost all wealthy countries have coasts and are far removed from the equator.

(The logic is broadly that equatorial regions have health disadvantages because of chronic diseases like malaria, as well as agricultural disadvantages because of rapid evaporation of water and so on. Coastlines are important for trade.)

Curious about this I found two maps that seem to support the idea that coastlines matter. First is this map of China, looking at GDP per capita in each of its provinces (in 1997):

The correlation here is strong, with coastal regions tending to be wealthier than inland regions.

Next is the US state map by per capita real GDP, from the Bureau of Economic Analysis:

All of the richest states except Wyoming are coastal while most of the poorest states have little or no coast. (The picture is not as clear as the Chinese map, though, with a large wealthy region west of the Great Lakes.)

When people ponder global wealth inequality they don't need to assume some kind of foul play or blame unfair trade systems. Inequality could be built into the soil nations are founded on.

Friday, December 10, 2010

Good times for weird ideas

One strange side-effect of the economic crisis is that extreme critics of society are using the failure of mainstream economics as evidence to support their radical alternatives. All these extremists had been predicting failure, for completely different reasons, for years so now that it has finally happened they claim credit.

A few examples:

The Communist Part of Ireland, describe the crisis as a failure of the "monopoly capitalist system — imperialism".

Al Qaeda gloated that the recession was caused by expensive "crusades" in Iraq, Afghanistan and Pakistan, and also by the secular abandonment of Allah's laws forbidding the charging of interest on loans.

All the people who put Ayn Rand's Atlas Shrugged into the best-selling list again presumably thought that socialism and government interventionism caused the crisis.

This dude blames the cessation of economic protectionism for America's economic problems.

Rajan Zed, president of the Universal Society of Hinduism, blamed "excessive human greed" for the crisis...

...As did Pope Benedict...

...And the Dalai Lama.

And so on. Lots of people are saying they told us so, yet for contradictory reasons. They can't all be right.

In Ireland the crisis has caused a rush for scapegoats and explanations, and here too there were lots of fringe groups who had been predicting failure for years. Judging by comments on Twitter and Facebook, by the rising support for the Labour Party in polls and by the discussions on television, the new star of the crisis is the centre-left, those who explain the recession as a failure of "light touch regulation".

They blame Ireland's supposed shift to the economic right, its loose financial regulation, its prioritising welfare for banks and corporations over welfare for the poor, for the present crisis. There is a spectrum there between far-left and centrist, but they all benefit from a wider anger towards (and scapegoating of) bankers, politicians and developers.

For them the solution will involve a mucher bigger government: higher taxes on the rich and on corporations, higher social welfare, greater redistribution of wealth, and much tougher regulations. One recent focus of this centre-left anger is at the government's policy of reducing minimum wage by one euro per hour.

Not long ago I shared most of their views, I also thought we needed greater redistribution of wealth and top-down regulation of markets. I gradually changed my mind when I read things like this.

Are Regulators Rational? is a paper by Slavisa Tasic applying psychological research to regulators of economies and societies. Tasic argues that most psychological analysis of economics has tended to focus on the irrationality of markets and market participants, yet they apply as well to those trying to tame and control markets. Tasic lists a number of ways that regulators may mismanage economies.

1) Action bias
Following a crisis leaders and regulators feel pressure from the public to do something. Around the world this most recent economic crisis was met with gigantic government stimulus packets and bailouts. In Ireland the government was panicked into guaranteeing deposits in private banks, placing the entire state in danger. Regulators feel they must do something, yet doing nothing may be less harmful.

The Iraq War may be another example of action bias, with governments deciding that something had to be done, scared into aggressive action by the threat exposed by 9/11.

2) Motivated Reasoning
Regulators are as prone as the rest of us to subconsciously favour policies which bolster their own strength and influence. Other specialists behave in the same way: Tasic explains how economists may favour an economic system that involves lots of government intervention since that is going to create demand for well-educated economists to oversee it.

Regulators or economists who argue that there is no reason for regulation or controlled economies are putting themselves out of a job. It is in their interests to promote more regulation.

3) Focusing illusion
Economies are highly complex, but people tend to focus on, and overestimate the importance of, individual factors in the overall situation. The immediate benefits of a particular intervention are clear, but knock-on side-effects are not.

For example, when the state rescues a large business from collapse it saves lots of people from unemployment. However the money used to protect that company is taken from other tax-payers who suffer from the intervention. Also that large company's rivals, who are also employers, are now at a disadvantage.

Lobby groups focus on their particular area of interest, yet their desired regulation may have negative side-effects on the wider public.

4) Affect heuristic
This is the connection in human psychology between reason and emotion. In politics it is related to confusion between good intentions and good results. Tasic points out that modern society is mainly driven by self-interest, quoting Adam Smith in 1776:

it is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

Despite this, public discourse often focuses on good intentions instead of good results. Demands for greater foreign aid, welfare and regulation all come from positive desires to improve the world, but some may actually make it worse.

Tasic is off-hand about the minimum wage argument going on in Ireland today, insisting that it increases unemployment as "many of the workers that would otherwise work for a wage smaller than the new legal minimum now become or remain unemployed".

A final example is the well-intended Americans with Disabilities Act which, he says, increased the cost to employers of firing people with disabilities so they simply decided to avoid employing them in the first place, increasing unemployment for the group.

5) Illusions of competence
Seeing and understanding simple surface mechanisms in science or economics, people regularly feel wrongly confident that they actually understand the entire process. Overconfident regulators believe that they truly understand how the economy works, and that they are able to manipulate it.

Amusingly, Tasic points to studies connecting greater knowledge with greater humilty and an appreciation of the unknown. Physics novices are worse at assessing the difficulty of a physics problem than experienced physicists, he says. A truly knowledgeable person is one who understands better the limits of his or her knowledge.

As a consequence, those people who volunteer to control economies and societies, and claim to understand them, must be especially ignorant people, unaware of their own ignorance.

Today in Ireland we have people confidently demanding new regulations and expanded state interventions, unaware even of their own inability to regulate wisely. These, by Tasic's logic, are the last people we want in power.

Tasic's ideas are interesting but it is difficult to know what the implications are for a preferred system of government and regulation. I suggest three possibilities:

a) Libertarian/anarchistic
If we cannot understand the consequences of regulation then perhaps we should regulate as little as possible. One danger here, however, is that we also cannot predict the consequences of the massive deregulation needed to get there. So perhaps a better alternative is:

b) Conservatism
Things aren't so bad now, so perhaps we should simply keep things as they are. The global environment keeps changing, however, and that may make today's laws and regulations obsolete. From the 17th to 19th centuries Japan's Tokugawa government almost entirely sealed its borders from foreign trade, even executing fishermen who had been rescused by foreign ships and returned to Japan. This seclusion helped Japan develop economically and avoid war but left it highly vulnerable to the high-tech weaponry of the Western powers, and was abandoned utterly in the mid-19th century. So another alternative is:

c) Trial and error
A pragmatic approach, trying out new ideas and discarding them if they don't work. One problem is that interest groups may benefit from policies that harm the economy as a whole and lobby against their withdrawal. The fury in many European countries over austerity budgets that cut welfare spending shows how difficult it is to reverse regulations and interventions once passed.

There may be no simple solution. But I am certainly not charmed by the populist demands for drastically increased government regulation and spending. There may still be wisdom in Henry David Thoreau's observation in 1849:

"That government is best which governs least."

Tuesday, December 7, 2010

AIDS decrease: a puzzler

There have been two loudly disagreeing views on how to reverse the AIDS pandemic in Africa. One focuses on condom use and safe-sex educational programmes. The other emphasises abstinence and monogamy.

Enter Uganda, whose strongly decreased AIDS prevalence prompted commentators from either side to claim credit.

So which group is right?

I was browsing the UN Department of Economic and Social Affairs, Population Division, when I came across their national estimates for women from 15 to 49 who are "married or in union" and currently using condoms, or whose partners are using condoms. (Click Contraceptive Prevalence here.) Results:

Uganda 1995: 0.8%
Uganda 2001: 1.9%
Uganda 2005: 1%
Uganda 2006: 1.7%

Now at its height, in 1991, AIDS prevalence ran at around 15% of all adults in Uganda. Yet these UN figures show that only four years later, in the middle of a prolonged decline in AIDS, less than 1% of women in relationships were using condoms.

So that's a puzzler. It seems unlikely that condom use could have reversed the rise of AIDS if hardly anyone was using them.

There are caveats: the UN statistics above might be stronger if they included men or women not in "marriage or union". Also a major factor for the improvements in Uganda is the grisy fact of high death rates among the afflicted: if people die before they get the chance to spread the disease then the disease naturally declines.

Also, the US Agency for International Development does show rising sales of condoms in Uganda, from less than one million in 1991 to around 23 million in 2000. Yet Uganda had a population of around 24 million in 2000, so even then the average person (if we assume only adults are buying condoms and Uganda has a young population) must only have bought a handful of condoms over the course of the entire year. There don't seem to have been enough condoms in use to explain the decline of AIDS.

Thursday, December 2, 2010

The march of the dinosaurs

The political term "conservative" differs in meaning from place to place as populations look back on different historical golden ages.

In the 2000s the US experienced a wave of "neo-conservatism" as George W Bush rose to power and took on ambitious democracy-building ventures abroad. The movement was controversial and political opponents quickly demonised it as the brutal and logical conclusion of right-wing conservativism: cutting taxes on the rich and sinking into debt to fund foreign imperialistic wars.

Yet the neo-conservatives emerged initially from the left, from social-democrats who had become disillusioned with the massive social programmes of the 1960s. As the neo-cons grew in power their ideas about American politics became the dominant ideas of the right. This rise of ex-socialist rightists left behind some of the other conservatives. From the remnants rose paleoconservativism.

Chronicles: A Magazine of American Culture is one of the main paleoconservative publications, and an astonishing glimpse into this perspective.

First the paleoconservatives have a very conservative emphasis on good manners. To them, the crude posturing of right-wing pundits like Glenn Beck is repulsive, as is the crass hedonism of the grasping rich. They complain about an alleged decline in old-fashioned politeness.

Paleoconservatives worship Christ, not the dollar and certainly not the flag ("to pledge allegiance to a flag is idolatry"), and many are Christian to the point of anti-secularism. They dismiss the modern liberal consensus over the rights of homosexuals and of abortion, seeing traditional Christianity as a central influence on American civilisation.

One great clash with Republicans comes in foreign policy: paleoconservatives favour American military withdrawal, even isolationism. For one, they are sceptical of the ability of governments to truly win their ambitious foreign wars, particularly their attempts to install democracies in regions with no heritage of democracy. Some paleoconservatives, though, hold a simple contempt for the various foreign peoples Americans find themselves fighting over. Islam is seen as a threat, Muslims as aggressive, traditional enemies to Christian civilization. The idea of fighting for Muslims in the Balkans or Middle East seems absurd.

Yet the paleoconservatives also reject the strong pro-Israeli stance of Republicans, and they sometimes criticise neo-conservatives for their simplistic and jingoistic anti-European or anti-French perspectives. They want to abandon Israel to its own struggles; the US should simply slash its military, forget its interventionism around the world, stop acting like an empire.

Instead manpower should be shifted back to protecting America's borders, from immigrants. The paleoconservatives are bitterly opposed to liberal border controls and see the flooding of Latin Americans and Asians into the US as a disaster: "mass immigration is a greater threat to the survival of our country than any terrorist campaign possibly could be."

They also want to control the flow of trade over borders, taking a more protectionist view of economics than the free trade-obsessed Republicans. Internally they oppose the welfare state and corporate bailouts for big business, instead favouring capitalism, albeit capitalism that adheres to local tradition. Think family corner shops, not Walmart.

Unlike other right-wingers who delight in economic growth and the social and demographic change that this causes, the paleoconservatives are truly conservative, nostalgic for a better time. Clyde N Wilson writes this interesting piece on things he misses in the US today. His list includes "my city without mosques and Hindu temples", seeing only American cars on the roads, an absence of illicit drug use, intelligent journalism and "finding a motel not operated by someone named Patel." This is nostalgia, unhappiness with modern life and with the immigration of Asians. Wilson wrote about missing simple things too, polite and hard-working students, buttermilk, postage stamps "with dignity and educational value" and so on.

The paleoconservatives sometimes like old things simply because they are old, emphasising tradition, bemoaning the shallow, the commercial and immoral messages of Hollywood. Instead of a powerful, imperial United States that stretches its military across the world and injects its hedonistic, soulless culture into foreign countries, they want an isolated US, Christian, peaceful, protected, traditional, European, abandoning both hip liberalism and arrogant neo-conservatism alike. Aggressive American nationalism is sometimes dismissed too, though, for nationhood should come from real personal ties with family, community, church and ethnic tradition, linking identity to a much more local patriotism than a pan-American nationalism.

They often reject the kneejerk liberal response to race-related issues. Here Tom Landess explains that many American heroes like Thomas Jefferson and Abraham Lincoln were openly racist, arguing that the modern southern states - constantly attacked for racism - are the least racist in the country.

They also reject the libertarian movement:

The tendency, if not the actual argument, of libertarianism in the last 50 years has been to deny that Soviet communism was ever a threat, to embrace mass immigration, to endorse global free trade, to abandon and ridicule both nation and religion, and to welcome the deliberate destruction of traditional culture and morality by whatever forces (in the state or outside it) are waging war against them.

These traditionalists of course clash with feminists. Thomas Fleming argues that the traditional woman had a respected place in the home while modern women are forced to work horrible and degrading jobs:

When women did hard work outside the home, it was because they had to. They were the victims either of some terrible economic decline or of liberal capitalism’s destruction of the social networks of Christendom. Many women who do servile and menial work today are in even worse condition, because they have internalized their servitude and are proud of clerking in a store or teaching violent hooligans in a public school.

One comment below that article describes a meeting of feminists at a restaurant in 1983. A rubbish barge floated past them on the nearby river, steered by a woman. The feminists all cheered, the woman ignored them, implying that feminism was: "a few busybody termagents make a lot of money at foundations or activist groups deconstructing civilization, while real women are forced by poverty to pick up their garbage."

The paleoconservative world view is often supported by quite detailed historical analysis. Articles explore the fall of the Roman Empire, seeking comparisons with modern USA, or the Englightenment philosophers and their impact on the Founding Fathers.

The paleoconservatives argue among themselves over these points, but these are broadly representative of the movement. It stands apart self-consciously from the mainstream conservative movements in the US, quick to distance itself from them and denounce their perceived flaws. Still, to modern liberal discourse their views are often obnoxious: racist, sexist, xenophobic and fearful. There would be little time for them in most mainstream media but that, of course, is precisely why it's worth reading them a little now and then.

Tuesday, November 30, 2010

Won't somebody think of the little people?

Considering occasional complaints about the domination of high-income jobs and political jobs by males, perhaps it is worth looking at the income gap between two other groups: the tall and the short.

We've know about this for some time, in 1995 Jonathan Rauch wrote on life-long discrimination against the short:

Give 100 mothers photographs of two 19-month-old boys who resemble each other closely, except that one is made to look taller than the other. Then ask the mothers which boy is more competent and able. The mothers consistently pick the "taller" one....

A survey in 1980 found that more than half the chief executives of America's Fortune 500 companies stood six feet tall or more.... Other surveys suggest that about 90% of chief executives are of above-average height.

Another American study argued that heightism is very real and has a significant impact on incomes:

Data suggest that every additional inch in height is associated with a 1.8 to 2.2 percent increase in wages — or roughly $789 per inch, per year. Moreover, the tallest 25 percent of the population gets a 13 percent boost in median income compared with the shortest 25 percent.

In the US, taller presidential candidates usually win; They haven't had a president under 5'9 since William McKinley in 1900.

So it seems that short men are fucked, but not literally. Statistical analysis by the bloggers at OkCupid, an online dating site, found that taller men and short-average women both attract the most unsolicited contacts from other members. The most popular men were from around 6' to 6'5" while the most popular women were between 5' and 5'5". The OkCupid team note that men appear to be aware of this and many are probably exaggerating their height by as much as two inches.

With all this towering discrimination against the little fellas, where are the smallist campaigners demanding interventions to increase their wealth and power? It seems arbitrary that discrimination against race, religion, sex and sexuality is denounced and legislated against when it is ignored offhand against the short.

Saturday, November 27, 2010

Daniel O'Connell versus the protest

Earlier today a major protest march organised by the Irish Congress of Trade Unions passed through Dublin city to voice opposition to budget cuts. There is a lot of anger here now at years of apparent mismanagement of the economy by the government.

One odd observation concerns the direction of this march, which passes over O'Connell Bridge, past the statue of Daniel O'Connell and ends on O'Connell Street. Daniel O'Connell was one of the great historical nationalist heroes of Ireland...

...And no fan of trade unions, according to the early 20th century socialist leader James Connolly:

But as O’Connell grew in strength in the country, and attracted to himself more and more of the capitalist and professional classes in Ireland, and as he became more necessary to the schemes of the Whig politicians in England, and thought these latter more necessary to his success, he ceased to play for the favour of organised labour, and gradually developed into the most bitter and unscrupulous enemy of trade unionism Ireland has yet produced, signalising the trades of Dublin always out for his most venomous attack.

O'Connell's politics were informed by the liberal European idea of laissez-faire capitalism, and he condemned trade unions:

“There was no tyranny equal to that which was exercised by the trade-unionists in Dublin over their fellow labourers. One rule of the workmen prescribed a minimum rate of wages so that the best workman received no more than the worst. Another part of their system was directed towards depriving the masters of all freedom in their power of selecting workmen, the names of the workmen being inscribed in a book, and the employer compelled to take the first on the list.”

He recognised that by increasing tailors' wages in Dublin unions gave low-paid tailors in Glasgow a competitive advantage. O'Connell even opposed an 1833 law forbidding the employment of children under the age of nine in factories (except silk mills):

“Let them not”, he said, “be guilty of the childish folly of regulating the labour of adults, and go about parading before the world their ridiculous humanity, which would end by converting their manufacturers into beggars.”

So while 21st century protestors were marching past the O'Connell statue, they were passing a man who would have scorned their welfare state, their minimum wage and their trade unions. He probably would have scorned the state bailouts of big businesses too, of course. What Daniel O'Connell wanted was good old-fashioned capitalism, free from the intervention of governments or unions.

Friday, November 26, 2010

Or maybe it was the ECB's fault?

The Austrian School of Economics argues that government attempts to control economies using central banks actually exacerbate the boom and bust cycle. Very broadly, they argue that in a truly free market, low interest rates are a sign that lots of people are saving money, that there is a lot of money put aside for future consumption. Businesses respond to this message by expanding in the hopes of capturing some of that future consumption.

When central banks lower interest rates, however, they give the market hope about future consumption based on savings which do not exist. Businesses expand, individuals spend more and invest more. For a while it seems like the economy is growing healthily, however it is based on demand which does not really exist since the savings that promise future growth are absent. When the illusory demand is revealed, many of the expanded businesses realize that they borrowed money in expectation of demand that never existed and now, unable to generate enough revenue to pay back their loans, they go bust:

Investments in them need to be liquidated, some at a total loss. The investments in those long term projects now look like irresponsible speculation on an assumption of future growth. The Austrians call them “malinvestments.”

So did this happen in Ireland? Let's look at how interest rates were managed by the European Central Bank from 2003 to 2010:

If the Austrian School was right then we would see some kind of boom from 2003 to some time after January 2006. The Central Statistics Office give us this graph of construction output from 2003-2008:

Just to make it easier to see any correlations, here are the two graphs crudely overlaid:
As predicted, low interest rates coincide with high investment in construction. When interest rates rose, the construction bubble burst. If we look at employment in the construction sector from 2004 to 2007 we see the same rapid rise, stagnation and then decline:

So far so good, we are seeing fairly clear data. The United States, to give another example, also experienced a housing bubble when the Federal Bank kept interest rates low in the early 2000s. Japan, meanwhile, halved interest rates from 1986 to 1987, keeping them low until beginning to increase them in 1989. The country experienced a frenzy of construction speculation; by 1991 the total land cost of a country the size of California was worth four times the total property of the US. In 1980s Japan, as 2000s Ireland, confidence that property prices would keep rising led individuals to take out colossal loans with the belief that they would be able to sell on their homes at a profit and pay off the mortgage:

So Mr. Nakashima, a Tokyo city government employee who was then 36, took out a loan for almost the entire $400,000 price of a cramped four-bedroom apartment. With property values rising at double-digit rates, he would easily earn back the loan and then some when he decided to sell.

Or so he thought. Not long after he bought the apartment, Japan's property market collapsed. Today, the apartment is worth half what he paid. He said he would like to move closer to the city but cannot: the sale price would not cover the $300,000 he still owes the bank.

So why did the European Central Bank keep interest rates low while Ireland was booming, helping to create the disastrous construction bubble?

One problem was that some of Ireland's EU neighbours were not growing much in this period at all, so interest rates were kept low to stimulate their growth. Germany had a consistently high unemployment rate (oddly enough their unemployment is far lower now than it was in the early 2000s). Its GDP slid in and out of recession and its inflation rate was a lot lower than Ireland's.

So the ECB followed policies that attempted to boost those slow-growth countries like Germany, but this badly damaged peripheral countries with differing economies, like Spain and Ireland. The Austrian School economists would have us do away with central banks completely, but at least this crisis raises questions about the ability of a European Central Bank to manage several distinct eurozone economies all at the same time.

For a more complex and nuanced look at the role of euro-membership and Ireland's economic crisis, read Professor Patrick Honohan's Euro Membership and Bank Stability Friends or Foes? Lessons from Ireland.

Wednesday, November 24, 2010

How conformity killed the Celtic Tiger

The New York Times has an interesting article on the way that people take into account the opinions of others when deciding the worth of a product. In one study, 14,000 individuals were able to listen to songs they had never heard before, rate and, if they liked, download them. The participants were split into two groups: one group who only saw the names of the songs, the other group who could also see how others had rated each song.

The second group was subdivided into eight discrete groups or "worlds". An individual within one of these worlds could see the song-ratings by his fellow world-members, but not the ratings of non-members. The researchers found that individuals' behaviours were deeply swayed by the ratings given by their peers:

In all the social-influence worlds, the most popular songs were much more popular (and the least popular songs were less popular) than in the independent condition. At the same time, however, the particular songs that became hits were different in different worlds, just as cumulative-advantage theory would predict. Introducing social influence into human decision making, in other words, didn’t just make the hits bigger; it also made them more unpredictable.

...The song “Lockdown,” by 52metro, for example, ranked 26th out of 48 in quality; yet it was the No. 1 song in one social-influence world, and 40th in another.

This suggested that in reality the most successful musicians owe quite a bit of their success to luck. Some are popular partly because they are popular: individuals absorb the opinions of their peers and conform to a common public support for a particular band.

Similar things happen in wider economies. During the early 2000s house-building was in the Irish zeitgeist. Just as the arbitrary popularity of particular songs on the New York Times article was reinforced by peer perceptions of their worth, in Ireland building houses was a self-perpetuating fad that drew ever more money and labour into an upward spiral of construction.

People talked offhand about "investing" in property, indicating an assumption that prices could only increase. Ireland's household saving rate became exceptionally low, while household debt grew extremely high, both signs that Irish people expected the future to bring even greater wealth than the present. Employment in the construction sector bloated 40% between 2002 and 2008; there was a general rush in the same direction as public optimism and high borrowing trends became the norm.

That optimism was misplaced. Houses were not wise investments. Populist increases in government spending were paid for by taxes on construction, and immediately became too expensive once that revenue dried up. The zeitgeist was destructive, a great number of people got it wrong.

Today it is popular to blame individual actors from the bubble years - politicians, bankers and builders - but the low savings and high debt rates indicate that there was a wider spending frenzy that took in many more people. There were dissenting voices during the 2000s but most people took their cues from their optimistic peers and neighbours instead of pessimistic rebel economists, dragging the economy towards its collapse.

This is all quite depressing.

Yet remember that conformity and a wide public optimism turned out to be misplaced and destructive, leading to the economic crisis. Might the majority of people now also be mistaken in their more recent pessimism? Might there not be value in undermining the new pessimistic consensus just as there was value in the 2000s in warning against the optimism? In finding scapegoats in politics and business many people may be missing the destructive nature of conformity itself, be it positive or negative.

The majority of people were wrong in the recent past. Consumer sentiment was high in the early 2000s when the economy was built on sand, yet it is much lower today. Like the credit rating agencies that proved their inability to predict the future, perhaps we should take hope from today's pessimistic zeitgeist. They were wrong before, hopefully everyone is wrong again.

Tuesday, November 23, 2010

North Korea's insularity and the risk of war

Days ago I wrote about Thomas Friedman's theory that international trade and the sprawling of multinational corporations across borders helps to bring peace by increasing the costs of war. This morning I wake to the news that North and South Korea have exchanged artillery shells in a clash that killed at least two soldiers.

South Korea's economy is deeply interconnected with the wider world. In 2009 the World Trade Organisation estimated South Korea's total exports at US$363,534,000,000 ($363.5 billion) and imports at US$323,085,000,000 ($323.1 billion).

North Korea managed exports of only US$1,550,000,000 ($1.5 billion) and imports of US$2,080,000,000 ($2.1 billion).

Below are the sizes of North and South Korean imports and exports expressed in US dollars per capita:

South Korean exports: $7,480 per capita
South Korean imports: $6,648 per capita

North Korean exports: $65 per capita
North Korean imports: $87 per capita

These figures do not show what countries are being traded with, lessening their usefulness for exploring Friedman's idea. Still, as a superficial glance at the numbers it is striking. North Korea has exceptionally little economic intercourse with the outside world: one wonders if this increases the likelihood that tanks will eventually pour over their borders instead of trade.

Thursday, November 18, 2010

Ireland's difficulty...

In 1916, while Britain was busy fighting a disastrous war with Germany on the continent, a group of Irish nationalists decided to launch a rebellion to win Ireland independence. Reasoning that "England's difficulty is Ireland's opportunity", the rebels declared Ireland an independent republic, but the British hit back and stamped out the rising. The idea exploited by Irish rebels was hardly unique: when Ancient Rome faced economic difficulties it was invaded, divided and sacked. Rome's difficulties were opportunities for Goths and Vandals and Huns.

1916 was the time of England's difficulty. 2010 is the time of Ireland's difficulty as the economy faces serious problems. But history does not repeat itself, things are different now. Ireland, burdened with a massive debt and experiencing emigration again, is not faced with some foreign power determined to take advantage of its weakness through violence.

Instead the interdependence of modern economies is so pronounced that foreign powers hurry to prop up their neighbours in times of economic crisis. American journalist Thomas Friedman proposes a "Dell Theory of Conflict Resolution" which may explain why weaknesses in one country no longer inspire invasions by another, why debt-stricken Ireland won't be occupied or enslaved:

The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain.

There may be negative effects to economic globalisation but Friedman argues that the spread of corporations across national borders means that the destruction of one country will cause deep economic harm to its attacker, making peace a much more profitable option.

Tuesday, November 16, 2010

Using other people's discrimination

The Economist argues that sexism in South Korea could create market opportunities for open-minded business people. Women are educated to levels similar to men in South Korea, but suffer discrimination in the workplace, paid 63% less than men:

This creates an obvious opportunity. If female talent is undervalued, it should be plentiful and relatively cheap. Firms that hire more women should reap a competitive advantage. And indeed, there is evidence that one type of employer is doing just that.

Jordan Siegel of Harvard Business School reports that foreign multinationals are recruiting large numbers of educated Korean women. In South Korea, lifting the proportion of a firm’s managers who are female by ten percentage points raises its return on assets by one percentage point, Mr Siegel estimates.

There are interesting implications for other highly-educated groups facing workplace discrimination. The reluctance of most employers to reward their talents creates an opportunity for more tolerant employers to gain a competitive advantage by employing these high-quality workers at a lower cost.

In the South Korean example women benefit from the foreign companies willing to employ them, albeit at lower incomes than the men earn in other companies. The Freakonomics Blog describes an anecdote about Alan Greenspan's consulting company which supposedly hired women specifically because sexist discrimination in rival companies meant that he could hire competent women for a lower cost than the equivalent men.

One point to consider is whether or not this scenario could actually give women and other victims of discrimination a competitive advantage in looking for jobs. If employers expect these groups to accept lower wages, may they overlook traditionally priviliged (overpaid) groups? I presume this would strengthen the bargaining position of victims of discrimination in the long run, helping them to demand higher wages, and that eventually would remove their competitive advantage over priviliged groups.

Outrage and Orkut

Since 2005 I have been an active member of Orkut discussion forums, discussing international relations, economics and politics with a highly diverse multinational group.

We discuss anything. Most of us have been on Orkut for several years so we have grown used to encountering totally incompatible world views, violent and outrageous ideas that never reach mainstream media. Islamists, Hindu extremists, Communists, anti-Muslimists, pacifists, neo-conservaties, anarchists and other radicals clamour for attention and domination.

One side-effect of this vigorous debates has been a great desensitisation to controversial topics. We simply don't acknowledge taboos, to us nothing in politics is sacrosanct. This experience wears down the impulse to respond with outrage to strange ideas.

Unfortunately offline most debate does not function like this. Mainstream media tend to ignore extreme arguments and societies develop taboo topics that are meant to go unquestioned. Desensitised from my time on Orkut, I naturally take a direct approach to debates elsewhere, quickly questioning concepts taken for granted by others. By challenging these sensitive issues I am sometimes met with astonishment and rage.

So here are nine taboo topics of the kind we cover in Orkut, yet make people uncomfortable outside:

New Racism
Famous scientist Dr James Watson was lambasted a few years ago for blaming African poverty on the low intelligence of Africans. Racism's association with Nazi Germany made it a taboo topic; now any support for scientific concepts open to biologically-influenced behavioural differences in races is thoughtlessly denounced.

But Dr Richard Lynn's 2002 book IQ and the Wealth of Nations explicitly links economic development with the varying intelligence of their inhabitants. Lynn argued that IQ is highest in wealthy East Asian nations like Japan, Hong Kong and South Korea, followed by West European nations like Germany and Sweden. IQ is lowest in poor African countries.

Lynn emphasises the detrimental effect of malnutrition on intelligence, but also accepts genetic differences between races. His 2006 book Race Differences in Intelligence: An Evolutionary Analysis argued that the racial groups developed different levels of intelligence because of the different environmental pressures they endured. Northern humans supposedly faced Ice Ages which increased the selection pressure and made the groups more intelligent than their southern cousins.

Of course it may all be nonsense but too often these politically unpalatable ideas are simply dismissed from public debates without consideration. Racism is presumed bad, so anyone promoting it is silenced with contempt.

Digital child porn
The creation of child pornography may involve the abuse of children, which most of us consider unacceptable. However the creation of digital pornographic images, straight from the imagination of the artist, does not directly harm anyone. If paedophiles exchange or sell digital art of child pornography, should they be punished?

A common argument against this is that these artificial images may normalise the sexualisation of children to paedophiles and lead them to abuse children in reality. An opposing argument focuses on the apparent dramatic decline in sexual violence coinciding with the liberalisation of pornography, suggesting that porn may act as a substitute for rape.

Again this debate is almost impossible to hold in public because many people will be so outraged and offended by the idea of child pornography that advocates of liberal laws will be shouted down.

Don't support the troops
We just passed Remembrance Day/Armistice Day/Veterans Day with its usual signs of respect for soldiers, part of a wider consensus on showing soldiers respect for risking their lives to protect their countries.

There are lots of uncomfortable questions to ask about this respect.

Nazi Germany must have produced its own great, honourable and brave young men, as did the Soviets and the Taliban. George W. Bush called the Al Qaeda attackers of 9/11 'cowardly', yet they sacrificed their lives for the cause. If not willingness to take risks to serve nations or ideals, what determines bravery?

If memorial days are meant only to show respect to the soldiers of one side it seems less a celebration of their individual acts of bravery and more a confirmation of the ideologies that sent them to die. The peer pressure to respect the troops may be a cynical way to prevent people from questioning wars. People who do question this are condemned for insensitivity and lack of patriotism. Laurence M. Vance makes the point very aggressively here:

Why should we call them heroes, give them military discounts, grant them veterans preference, express our support for them with ribbons on our cars, honor them with a holiday, hold military appreciation church services for them, and thank them for their "service"?

...So why should a Vietnam veteran be proud? He was typically young, ignorant, deceived, and drafted. He may have fought obediently, valiantly, selflessly, and fearlessly, but since he had no business fighting in Vietnam in the first place, I have nothing to thank him for.

...What, then, should we thank our soldiers for? Should we thank them for fighting an unconstitutional war, an unscriptural war, an immoral war, an offensive war, an unjust war, or a senseless war?

Anything to do with nationalism
Flags are pieces of cloth, nations have imaginary borders, but it is still difficult to question patriotism or nationalism without being called a traitor.

Immigration control
Sometimes the very people proudly celebrating national soldiers criticise immigration controls as racist. However there are solid arguments for maintaining extremely tight immigration controls, not least Professor Robert Putnam's argument that ethnic diversity harms society:

In his findings, Putnam writes that those in more diverse communities tend to "distrust their neighbors, regardless of the color of their skin, to withdraw even from close friends, to expect the worst from their community and its leaders, to volunteer less, give less to charity and work on community projects less often, to register to vote less, to agitate for social reform more but have less faith that they can actually make a difference, and to huddle unhappily in front of the television.

In Japan the value of ethnic homogenity was openly acknowledged, former Prime Minister Yasuhiro Nakasone remarking once that lower academic results by American students could be blamed on the high presence of blacks, Mexicans and Puerto Ricans in the US. Some observers argue that Japan's unusually low level of violent crime is partly explained by its lack of diversity.

Meanwhile Professor Jerry Muller explains Europe's modern history of peaceful coexistence in terms of successful ethno-nationalism. The terrible wars of the early 20th century helped to divide Europe's ethnic groups into highly homogenous nation states (Belgium and Switzerland being the big exceptions). After World War II, millions of Germans fled or were forced out of their neighbouring countries into Germany, a process Winston Churchill supported:

Expulsion is the method which, so far as we been able to see, will be the most satisfactory and lasting. There will be no mixture of populations to cause endless trouble… A clean sweep will be made. I am not alarmed at the prospect of the disentanglement of population, nor am I alarmed by these large transferences.

Finally the rise of far-right parties in several European countries suggests that lots of indigenous (as the BNP calls white Europeans) people fear the increasing populations of immigrants. Perhaps the failure of mainstream parties and media to discuss negative effects of immigration has given strength to the extremists.

Democracy
A list of countries by GDP per capita (PPP) is topped by the following:

1 Liechtenstein - mixed democracy where the Prince still holds considerable power
2 Qatar - monarchy
3 Luxembourg - democracy (with constitutional monarch)
4 Bermuda - democracy with constitutional monarch
5 Norway - democracy with constitutional monarch
6 Jersey - democracy
7 Singapore - authoritarian republic
8 Kuwait - autocracy (broadly speaking, considered "authoritarian regime" in The Economist's Democracy Index)
9 Brunei - monarchy
10 Faroe Islands - democracy

The high score of several autocratic states is explained by some as a sign of the failure of democracy to manage economies. People in democracies supposedly vote to rob other citizens via taxing, eventually bloating the state spending on welfare to unsustainable levels. Politicians have a short-term incentive to please the masses so they raid the state's coffers and spend as much as possible.

Monarchs, however, are going to hand the state down to their children so they have a long-term perspective.

I find this argument unconvincing but still, it would be nice to have it considered. Democracy, too, should be no taboo topic.

Incest
Historical taboos on incest make sense since sexual relations between close relatives can produce genetic diseases in the offspring.

However sterilisation or contraception can greatly reduce the risk of producing children of any kind. So does that make incest alright? Having rejected traditional discrimination against homosexuals, should modern societies also withdraw prohibitions on incestuous relations? In any case debates on this may be hampered by the disgust many people feel for the idea of incest.

Sex and intelligence
Back to the troublesome Dr Richard Lynn who this time argues that men have a higher average IQ than women. Lynn uses this, and other biologically-determined behavioural differences, to explain the low participation of women in high-intelligence careers. I'd like to see him argue that at a feminist conference!

Rape about sex, not power
Professor Randy Thornhill and Professor Craig T. Palmer dismiss the modern consensus that rape is about male desire to dominate females and that rape is a symptom only of dysfunctional sexist societies. Men rape not to dominate women, they say, but because rape was a successful behavioural trait for reproduction. Men who raped women in the past were evolutionarily successful, passing on their genes. The desire to rape is similar to the desire for consensual sex in that both gave the man higher reproductive success.

They add that how a woman dresses may alter her risk of rape. This particular concept is such a taboo that they actually predicted they would be 'condemned' for mentioning it.

That a woman’s manner of dress may affect her risk of rape is eminently reasonable in view of what is known about certain sexual adaptations of men. The following combination of sexual adaptations is expected to lead some men to rape: eagerness to have sex with new partners, impulsiveness in the pursuit of such partners, sexual motivation upon viewing women’s secondary sexual traits, and tendency to conclude that a woman is signaling sexual interest when she is not. This is not to say that most rape victims will be wearing miniskirts, or blouses that reveal their breasts. It is to say that dress is anticipated to be a risk factor in some situations, especially when coupled with other risk factors that stimulate men’s sexual motivation.

(Some evidence to support Thornhill and Palmer's views comes from the fact that an overwhelming proportion of female rape victims are of the age of greatest sexual fertility. In evolutionary terms it would make little sense to rape an infertile child or old woman, yet if rape is about domination we would expect it spread more evenly through the age groups.) Needless to say, their findings were met with controversy and outrage.

So that's the last of the nine. I don't subscribe to some of these concepts but I see no reason for them to remain unmentioned in public debates. Everything is open to question.

Saturday, November 13, 2010

Murder rates steady or falling

This blog has sometimes questioned sensationalist media coverage of crime that hides the unsensational reality of stable, or falling, crime rates. In that context it is worth exploring longer-term figures from Gapminder's graph of murder statistics from 1950 to 2005.

First, United States, Japan and Ireland:

(For purposes of clarity I use a logarithmic graph which distorts the impression of the numbers somewhat.)

United States
Murder rates remained steady in the 1950s around 5 murders per 100,000 people, rising consistently during the 1960s to hit a high of 11 per 100,000 in 1974. From then until the early 1990s, rates hovered around 8 and 10, hitting another peak of 10 murders in 1993. After this murder fell steeply to only 6.4 in 2005.

To summarise, American murder rates rose, remained stable, and then declined. By the 2000s, rates were down to the level of the early 1960s.

Japan
Murder rates collapse from 2.2 murders per 100,000 to only 0.44 per 100,000 in 2005: a dramatic improvement.

Ireland
Murder rates start at an extraordinary low level in 1950, only 0.34 per 100,000. The 1960s and 1970s experienced a general increase in murders, peaking in 1981 before falling again. By 2005 Ireland's murder rates were down as far as its 1960s level.

Lest it seems that I cherrypick these countries, let's look at a few more. This time, Australia, Canada and the UK.

Australia
Starts at 1/100,000, increases and then falls quickly in recent years, falling to only 0.78/100,000 in 2005.

Canada
Starts at 0.95/100,000, increases significantly to a high of 2.7/100,000 in 1975, fell again to only 1.7/100,000 in 2005.

United Kingdom
Starts low, at only 0.49/100,000, rises dramatically in the 1960s and 1970s, peaks at a high of 1.6 in 1976 before falling. By 2005 murder rates were down below their 1950 levels.

The general trend for all these developed nations except Japan is for murder rates to rise, peak in the 1970s and then fall in the 1990s and 2000s. Japan has sustained unusual declines all the way. New Zealand has experienced a mild increase since 1950, peaking in 1992, Netherlands peaked in 1999.

People ought to feel pretty good about these figures, considering the improvements experienced in many countries since earlier peaks in violence. Do they? Just a few days ago I was buying groceries in a small village shop in Westmeath. The radio was playing in the background and the shopkeeper observed that there had been another murder in Dublin.

"There's one every day now," he said. Only after I returned to my car that I thought I should have mentioned the 13.3% decline in homicides over the last 12 months, down to 52. Hardly one every day! The perception of crime seems higher than its reality.

Thursday, November 11, 2010

In Cod We Trust

Today is the 92nd anniversary of the end of World War I, and millions of people acknowledged the deaths of combatants with a two minute silence at 11am. Public shows of respect to soldiers like this are so common in the US that American Army colonel Paul Hughes warns they may lead to some military officers considering themselves 'as almost an aristocracy' and 'better than those who are sending them off into harm’s way'.

Worth remembering, then, than the peacetime job with the highest risk of death in the US is fishing, at 111.8 deaths per 100,000 workers. Let's have a minute's silence to support the fishers: in cod we trust.

Sunday, November 7, 2010

Are you richer than royalty?

Below is a list of all the monarchs of England from Edward IV (born 1442) to Oliver Cromwell (died 1658), along with their ages at death:

Edward IV: 40
Edward V: approx 12
Richard III: 32
Henry VII: 52
Henry VIII: 55
Edward VI: 15
Jane Grey: 16
Mary I: 42
Philip II of Spain (married to and co-reigned with Mary I): 71
Elizabeth I: 69
James I: 58
Charles I: 48
Oliver Cromwell: 59

Edward VI, who managed to make it to 15 before dying of fever

The average life span for these monarchs adds up to 43.7 years. How does this compare with the modern world? Here are the five countries with the lowest life expectancy as listed in the CIA World Handbook:

Nigeria: 47.24
Afghanistan: 44.65
Mozambique: 41.37
Angola: 38.48
Haiti: 29.93

The Handbook estimates the average world life expectancy as 66.12. To give a second source, the 2010 UN Human Development Index lists the bottom four as follows:

Central African Republic: 47.7
Zambia: 47.3
Zimbabwe: 47
Lesotho: 45.9
Afghanistan: 44.6

It estimates the world life expectancy at 69.3. This means that almost every population in the world can expect longer life spans than the kings and queens of England from the 15th to 17th centuries.

All but the poorest people in the world have healthier lives today than the monarchs of old! That is one to quote when people complain about how hard life is today; modernity has brought drastic improvements in health and security to nearly every corner of the world. In life expectancy at least, we are almost all richer than historical royalty.

Saturday, November 6, 2010

Fear of a Muslim Planet

Here is a CNN news report claiming that the most popular name given to boys in Britain last year was Mohammad.

The report explains that Mohammad or variations of it (Muhammad, etc.) tops the boys list. The journalist explains that Mohammad has been among the top 10 names for years because of Muslim immigration and "high Muslim birth rates". The journalist admits that Muslims are only 4.6% of the UK's total population and asks a British imam about Mohammad's popularity, who explains that Muslims want their children to emulate Prophet Mohammad's behaviour.

This news report is, however, riddled with flaws. First is their prime assertion that Mohammad tops the list of boys names. Britain's Office for National Statistics actually lists the top 10 names for boys in England and Wales as follows:

1) Oliver
2) Jack
3) Harry
4) Alfie
5) Joshua
6) Thomas
7) Charlie
8) William
9) James
10) Daniel

Mohammad features on the CNN report because they choose to include all other spellings of it. However several of the English names are variations on the same name too. The total number of Mohammads are 7,535. The total number of variations on John (namely John and Jack) are 7,852, pushing John into first place.

Still, it could be argued that Jack is today used as a distinct name from John whereas the various spellings of Mohammad all refer to the prophet. That brings us to the next problem: what does CNN mean by "Britain"? The Office for National Statistics give only the names of England and Wales, for Scotland we need to access the General Register Office for Scotland, which gives us a top 10 of the following names:

1) Jack
2) Lewis
3) James
4) Liam
5) Logan
6) Daniel
7) Aaron
8) Ryan
9) Cameron
10) Callum

There are no variations on Mohammad in the top 50. Meanwhile, if we add the total number of Scottish Jacks to the English Jacks (excluding Johns) we get 7,735, which again pushes Mohammad into second place. So the CNN claim that Mohammad tops the list of male names in "Britain" for 2009 is simply incorrect.

Later in the report the journalist refers to the UK, which usually means including Northern Ireland, so we need to add their figures too. Northern Ireland Statistics & Research Agency gives us the following top 10 for boys:

1) Jack
2) Matthew
3) = Daniel
3) = James
5) Ryan
6) Adam
7) Ethan
8) Charlie
9) Thomas
10) Conor

No variations on Mohammad make the top 100, but we do get another 349 Jacks along with hundreds more for dozens of other English names like James, Matthew and Charlie. Simply by adding the Scottish Olivers and Northern Irish Olivers to the English Olivers (a total of 7,732), Mohammad is pushed down into third place.

So, to repeat, Mohammad was not the most common name for boys in the UK last year, CNN got that completely wrong.

One could argue that this is missing the point, the point being that Mohammad is one of the most popular names, indicating a massively increased proportion of the British population made up by Muslims. This, however, is deeply misleading for a reason hinted at by the imam interviewed in the video: British Muslim parents really like the name Mohammad, and among Muslims it is uniquely popular. There is no equivalent among the British non-Muslim population of a name so dominant.

Back to the statistics. In England and Wales there are no other obvious Muslim boys names in the top 100. Zachary, Reuben and Jude, yes, Hassan, Asad and Salman, no. The Office for National Statistics include a word cloud of the top 100 male names, looking like this:

The real insight comes from the names for girls, however. Mohammad, as well as having no equivalent in English non-Muslim names, also has no equivalent among Muslim female names. There don't appear to be any exclusively Muslim names for girls in the top 100 at all. This is the word cloud for the top 100 female names in England and Wales, completely dominated by European names:

Imagine how different CNN's report would have been if they had looked at female names instead of male. Instead of using the unique dominance of Mohammad among Muslim boys (and misreading the statistics) to indicate a rising Muslim population they might note the absence of Muslim names for girls to conclude the opposite: that British Muslims must be few in number since their female names are utterly outnumbered by non-Muslim alternatives.

All of this is happening during a period of increased tension and controversy between Muslims and non-Muslims in Europe and North America, which makes CNN's clumsy coverage of this so disappointing and harmful. Europe is not Eurabia quite yet.

Thursday, November 4, 2010

Higher quality killers for Northern Ireland?

A team of American and Israeli researchers find that economic conditions do not influence the quantity of terrorism in a region, but may influence the quality of that terrorism:

High levels of unemployment enable terror organizations to recruit more educated, mature and experienced suicide terrorists who in turn attack more important Israeli targets....

Rational individuals become terrorists only if their utility of carrying a terror attack is higher than their utility of working in the market economy. When economic conditions are good, and unemployment is low, there are desirable opportunities for able individuals that choose to join the market economy. Therefore, only individuals with low ability, those unable to find a job even under good market conditions, are the ones who join terror organizations. When market conditions deteriorate, the economic opportunities of able individuals deteriorate as well. Worsening economic conditions should ease the recruiting of more able and better-educated individuals by terror organizations, even if the launching of a terror campaign and the quantity of terrorism are driven by strategic decisions taken by terror organizations irrespective of economic conditions.

In the light of rising activity by dissident republican paramilitary groups (extreme Irish nationalist groups that split away from the Provisional IRA when it decided to accept peace terms) and recent economic difficulties, this could be bad news for Northern Ireland's peace. It seems that terrorist organisations compete with ordinary employers for the most capable and intelligent men and women. The rise of unemployment may have shifted some potential recruits out of the workforce and into political violence.

Monday, November 1, 2010

Could generosity worsen wealth inequalities?

For the last two months I have been living in a rural area but today I visited Dublin and was struck by the great number of people begging around the city centre. The small towns I am used to are too small to support beggars so obvious signs of poverty are hidden; in Dublin poverty and disturbing inequality are very visible.

Since most calls for charity in the countryside are by organisations using mass media, they are pretty easy to ignore. However it is much harder to ignore face-to-face pleas from beggars in Dublin. Aside from true altruistic intention, there is a social pressure to be seen to aid other individuals, so ignoring a televised advertising appeal for charity in private is easier than ignoring an individual making eye contact and begging for help.

This got me wondering: if the tendency towards altruistic behaviour is stronger when individuals are communicating directly with others, do generous, influential people tend to do more favours for people they meet in person than for people they never meet?

If that is the case, their generosity and honest desire to help people out may tend to advance their own immediate circle of acquaintances, reinforcing the advantage of those social insiders. Well-meaning people with influence or wealth may do greater good by refusing to help out the people they meet instead of reinforcing a nepotistic elite.

Saturday, October 30, 2010

Globalisation is...

...Three Japanese pop stars singing a Swedish song in English to promote an American product. That's the Japanese electropop band Perfume performing Lovefool by Sweden's The Cardigans, a song popularised originally by its use in the American version of England's great play Romeo and Juilet (the original of which is set in Italy), which was directed by Australian Baz Luhrmann. This time, Lovefool is used to sell a version of the all-American drink Pepsi.

The jumble of linked nationalities is indicative of modern globalising cultural trends. Perfume accompany their performance with a typically Japanese bow and a musical and fashion style distinct to Japan. The song itself is Swedish, but The Cardigans took advantage of the Anglo-American domination of pop music by singing in English, and Perfume's music videos, distinctly Japanese, are still heavily influenced by those of American artists.

Globalisation allow us in Europe to access the distant cultures of Japan, and the rise of manga, martial arts and anime has shifted lots of Japanese culture westwards. But still the overwhelming shift of culture has been mostly in one direction, sprawling out from Hollywood to the rest of the world, often at the expense of indigenous cultures. In that context it seems easy to understand why some nationalists and conservatives reject American or Western cultures with such anger.

Thursday, October 28, 2010

Decline in crime being ignored?

The Irish Independent reports on the country's most recent crime statistics with a morose focus on spiralling robbery rates:

Ireland is in the grip of a robbery epidemic with an average of five people being held up every day, official figures revealed today.

More positive trends are pushed further down the article, yet a look at the statistics themselves shows that the overall picture of crime in Ireland is a remarkably good one. The following kinds of crime all saw decreases:

Homicide
-8.3% for the same quarter last year

Attempts/Threats to Murder, Assaults, Harassments and Related Offences
-12%

Dangerous or Negligent Acts
-19.4%

Driving/In charge of a vehicle while over legal alcohol limit
-15.6%

Kidnapping and Related Offences
-39%

Human trafficking offences
-34.7%

Burglary and Related Offences
-16.6%

Theft and Related Offences
-0.5%

Controlled Drug Offences
-11.0%

Weapons and Explosives Offences
-8.2%

Arson offences
-20.8%

Criminal damage (not arson)
-7.4%

Liquor licencing offences
-16.3%

Disorderly conduct
-1.7%

Offences against Government, Justice Procedures and Organisation of Crime
almost -27%

The only sections experiencing increases in crime were:

Robbery, Extortion and Hijacking Offences
+21.2%

Sexual offences (the dramatic increase here is 'mainly due to an on-going review of all cases involving alleged sexual offences reported')
+79.6%

Fraud, Deception and Related Offences
+1.0%

So Ireland has experienced an overall widespread decline in crime, which the Irish Independent reports as a "robbery epidemic".

The curious thing is that during the height of the economic boom media were reporting real increases in particular crimes which were directly connected to the population's growing wealth. Higher incomes allowed increased spending on alcohol and recreational drugs. Immigration pushed the proportion of young men (the demographic group most involved in crime) higher, and increased congestion on the roads. The recession has reversed these trends, leading to decreases in several kinds of serious crime.

These positive trends can be concealed by a media tendency to compare official statistics only in the very short-term. Rather than simply comparing each quarter or year with the previous one it may be more useful to extend to period a little further. For example, since 2004, the number of murders each year in Ireland went like this:



Manslaughter has experienced a consistent decline:


Dangerous driving has also caused fewer deaths:

Wondering how closely the declines in dangerous driving deaths and the decline of Ireland's economy correlate, I superimposed Ireland's joblessness rate from 2004 to January 2010 over the above image:

Loss of wealth has caused a fall in alcohol consumption, along with all the social ills that brings. Truck traffic has declined by 13%, and car traffic by 4%, driving down congestion and road traffic accidents. Good news stares us in the face, so it is disappointing that many news media sources still focus on the negative.

As for the robbery figures the Irish Independent called an epidemic, how do they look over the medium term?

Some epidemic: compared with 2004, robbery rates have actually fallen.

Monday, October 25, 2010

Bad prophets

The credit rating agencies have lowered Ireland's rating over the last few years, predicting rising risks in investing in Ireland's economy. So what did these seers predict during the height of the boom, when Ireland's economy was built on sand?

Moody's Investors Service, October 2005
However, we think the relatively broad and sustainable basis for housing demand is set to continue, reflected by strong demographics, substantial real income development and ongoing catching up effects. Therefore, the housing boom seems fundamentally backed.... Furthermore, Ireland’s economic base has broadened and become more stable over the years, indicating substantial resources to cope with risk of correction.... Moody’s notes that the Irish government’s fiscal position remains sound.

Fitch, July 2005
"The challenge for Ireland now is to adjust as the economy shifts to a lower GDP growth path of around 4%-5% per annum from average rates of close to 10% in the second half of the 1990s", said David Heslam, Associate Director in Fitch's sovereign department.

Standard & Poor's, December 2005:
“In the medium term, Ireland’s extremely strong credit standing should remain secure against nearly all foreseeable downside economic, political, and financial risks,” said Mr. Cullinan.

Ratings and Investment Information, Inc (R&I), January 2006:
...strong financial institutions with the ability to weather a recession also are sound. Based on the above factors, R&I has affirmed Ireland’s Foreign and Domestic Currency Issuer Rating at AAA. The Rating Outlook is Stable.

So these are organisations with a track record of failed predictions, yet they help determine nations' economic future. I have to agree with economist David McWilliams on this:

Like the whole economics and finance industry, the acid test of credibility should be how they answer the simple question: ‘‘Where were you in the boom?”

Saturday, October 16, 2010

To change a person

I remember when I was making my radio documentary on Falun Gong, the strange new religious movement banned in China, one of the practitioners said something that stuck with me. Zhao Ming was describing the miraculous changes, biological and behavioural, that supposedly occurred in Falun Gong practitioners:

In society, in anyone's life, what's most difficult thing? The most difficult thing is to change a person.... How to change a person from cancer, from addictions to bad habit. But all these are happening, just everywhere, all cases are like this among our fellow practitioners in China.

Ming's point was that decades of government interventions to dissuade citizens from engaging in harmful behaviour like smoking or drug abuse tended to fail where, he said, Falun Gong succeeded.

The most difficult thing
In modern societies governments are constantly trying to alter the behaviour of their citizens, with campaigns for road safety, responsible alcohol use, drug probitions and so on. As Ming observed, these campaigns have often failed at great cost.

In Britain the Young People's Development Programme was designed to reduce teenage pregnancies. At a cost of £2,500 per participant, the programme saw the rate of pregnancy substantially increase instead. The programme also failed to reduce drunkenness or cannabis use.

The British example is not unique, another study from Canada's McMaster University found in 2002 that 26 sex education trials 'do not delay the initiation of sexual intercourse, improve use of birth control among young men and women, or reduce the number of pregnancies in young women.'

Communist ambition
Much more ambitious and aggressive experiments in behaviour-control often faced similar failures. After decades of religious repression in Communist eastern Europe, the east European states were no less religious than those in the liberal west. According to Gallup's religiosity index (log-in necessary to access figures), respondents to a Gallup survey on religion were more religious in Poland and Romania than any other European Christian-majority country but Malta. West European states that made no effort to repress religious faith experienced collapses in religiosity.


Of course the same thing happened in Ireland as centuries of Protestant oppression left the Catholic Church utterly dominant while a few decades of independence saw it collapse. Meanwhile, well-intentioned attempts to reverse racial discrimination in the US with affirmative action may have worsened racial prejudice against black business managers.

Teachers
Examples of failed interventions are all around us. I remember in secondary school one teacher giving an impassioned fact-heavy talk on tobacco use, explaining the known effects of carbon monoxide, tar, nicotine and so on. After this lecture a large minority of my classmates went straight to the school's handball alley for a smoke. More started smoking in the following years. The modern faith seems to be that teenagers, given information, will choose to make the correct decisions. I saw that this was rarely true.

Of course my teenage peers deliberately rejected top-down values coming from teachers or the government so the very act of outlining prohibited behaviour inspired them to embrace that behaviour. Even when information was given to my peers in thoughtful and unjudgemental ways many of them shrugged off the rational application of that information and still behaved like fools. Because it's hard to control people, and predict their behaviour to incentives.

That's not to say that incentives must fail, rather that it is extremely difficult to predict how individuals will respond to them. There are examples of success, like the road safety efforts that saw a 42% decline in road deaths in Ireland since 2005.

But too often education and top-down social engineering projects are seen as panaceas. Like the demand that 'the government should do more', commentators demand extra classes in schools to solve social ills or fines to enforce positive behaviour. I have even read people arguing that "citizenship classes" in Ireland would have prevented the economic collapse: education is seen as the heal-all!

Be sceptical of government plans to alter the behaviour of their citizens. Even if the policital will is strong, the application such plans is always difficult and unintended consequences are a-plenty.