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John Quiggin

Urbanization in China

by John Quiggin on June 16, 2013

The NY Times has an interesting, but unsatisfactory, article, on government attempts to promote urbanization in China, with a target of 70 per cent by 2025. The story is mostly about farmers whose land has been acquired by fiat, which fits into well-established journalistic frames. The bigger issue, buried right near the end, is the fact that, under the hukou system of registration, people classed as rural can’t legally live in the city. So, while about 35 per cent of the population is legally urban, the true figure is more like 53 per cent. That makes nonsense of the figures quoted at the beginning of the article, and the suggestion of forced urbanization on a historically unparalleled scale. In reality, the announced target implies a modest slowdown in rural-urban migration, which occurred despite official disapproval.

The big question, at least from the viewpoint of rural Chinese, is whether China can shift to a universal social welfare and retirement income system to replace the workplace-based system of social welfare, of which hukou was part, and which made sense with comprehensive state ownership. This topic is touched on in the NYT article, but in a fragmentary and confusing way, and it’s one about which I know little. I’d be grateful if anyone could point to a more comprehensive treatment.

From an Australian point of view, the continued construction of high-rise apartment buildings, highlighted in the article, is a big deal, since it drives much of the demand for steel, and therefore iron ore and coking coal, that has underpinned our amazing run of good economic fortune, along with the willingness of both Australian and Chinese governments to implement large-scale fiscal stimulus at the time of the global financial crisis.

Update Paul Romer makes much the same points, from a more informed perspective than mine.

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Freedom is slavery

by John Quiggin on June 10, 2013

In August 2012, the US House of Representatives voted 414-0 against governments trying to control the Internet

The House resolution calls on U.S. government officials to tell the ITU and other international organizations that it is the “consistent and unequivocal policy of the United States to promote a global Internet free from government control.”
I wonder if we will see more resolutions like this. It wouldn’t surprise me.

The last three on the island

by John Quiggin on May 31, 2013

There’s been a spate of recent articles looking at a group of political writers referred to as “conservative reformers”.

The term ‘reformers’ is misleading since it tends to imply a shift in the direction of liberalism, which is not what the members of this group are hoping to do. More importantly, it implies the existence of a body of orthodox conservative thought against which the reformers are reacting. In reality, US conservatism has returned to the state identified by Trilling ’ a series of irritable mental gestures. The ‘reformer’ label covers all those self-identified conservatives who would like to present some sort of intellectually coherent policy platform. These days, that’s a surprisingly small set – the typical list includes Douthat, Salam, Ponnuru, Barro, Brooks, Levin, and Dreher.

There used to be many more people in this group. But one by one, they’ve either abandoned ship and moved to the left (Lind, Sullivan, Frum, Bartlett, Ornstein) or descended into outright hackery, an absolute requirement for employment at any of the main rightwing thinktanks (and it’s hard to recall, but there was a time when people like Glenn Reynolds and the Volokhs seemed like serious intellectuals).

Looking at the remaining group, it’s pretty clear that Barro and Dreher are well on the road to apostasy, while Brooks and Levin are now reliable hacks, if they weren’t always. So, that leaves three reformers (Douthat, Salam and Ponnuru) still on the island.

The reactions of the remaining three reveal the pressure they are under. Salam more or less openly shills for the party line from time to time, as in his (now-deleted) attack on the DREAM Act. It seems pretty clear that he will stick with the team, come what may.

Ponnuru responded with the plaintive observation that, to accept the positions being urged on him from the left, he would have to concede that the majority of US conservatives were crazy. But, if craziness is assessed on the basis of stated views, this is evidently true, as Ponnuru surely knows.

Pluralities of US conservatives believe, or at least claim to believe, that:

The President of the US is a socialist Muslim, born in Kenya
The earth is less than 10 000 years old
Mainstream science is a communist plot
Armed revolution will likely be necessary in the near future

Ponnuru hopes that he can engage in serious policy discussion with conservatives while treating such delusional statements as mere shibboleths – harmless assertions of tribal identity

Most interesting is this piece by Ross Douthat, setting out what he sees as the reform conservative policy program. As he observes, it’s not designed to appeal to (US) liberals, and its full of arguments that have been demolished repeatedly by the left.

OTOH, as Douthat admits, there’s no sign that the Republican party has any interest in a program of this kind. More importantly there’s nothing there that would seriously upset a moderate conservative like Obama, or either of the Clintons. It’s well to the left of the revealed preferences of someone like Rahm Emanuel.

Conservative reform of the Republican party is a project that has already failed. The only question is whether the remaining participants will choose hackery or heresy.

Paris in the Spring

by John Quiggin on May 26, 2013

It’s Mother’s Day in Paris, and also the occasion of a big demonstration against equal marriage, titled “Manif Pour Tous”, presumably with the unspoken reservation “sauf homos”. I ran into a bit of the crowd, coming back from this event 1, and they were certainly loud and boisterous. The idea that this was a rightwing version of a “Paris Spring” occurred to me, and also to this commentator in Le Monde.

I’ve seen it suggested that resistance to equal marriage is stronger in France, because there’s no legal recognition for church marriages – everyone has to go through the same civil ceremony. I’d be interested in other thoughts on that.

Overall, the real appeal of the right still seems to me to lie in anti-immigrant rhetoric and, within Europe, on attempts to blame the people of one country or another for a crisis of the entire global system of financial capitalism. The backlash against equal marriage seems to me to be the last gasp of the cultural right, rather than the basis for a sustained upsurge. But then, what I know about social developments in France would fit comfortably on a restaurant menu, so I’d be interested in what others have to say on this..


  1. I’m actually in town for this conference, where I’ll be talking about bounded rationality and financial crises. Essentially a preliminary attempt to describe the “Black Swan” problem in terms of formal decision theory, with the hope that this will lead to a more developed theory of financial bubbles and busts. 

The arithmetic of interstellar travel

by John Quiggin on May 12, 2013

There's been a lot of excitement about the discovery of two Earth-like[^1] planets, a mere 1200 light years away. Pretty soon, I guess, we'll be thinking about sending colonists. So, I thought it might be worthwhile to a little bit of arithmetic on the exercise.

I'm going to assume (generously, I think) that the minimum size for a successful colony is 10 000. The only experience we have is the Apollo program, which transported 12 astronauts to the Moon (a distance of 1 light second) at a cost of $100 billion or so (current values). So, assuming linear scaling (again, very generously, given the need to accelerate to near lightspeed), that's a cost of around $100 trillion per light-second for 10 000 people. 1200 light-years is around 30 billion light-seconds, so the total cost comes out roughly equal to the value of current world GDP accumulated over the life of the universe.

Even supposing that technological advances made travel possible over such distances possible, why would we bother. By hypothesis, that would require the ability to live in interstellar space for thousands of years. A civilisation with that ability would have no need of planets.

On behalf of my fellow Australians, I'm going to make a counter-offer. For a mere $10 trillion, we can find you an area of land larger than a typical European country, almost certainly more habitable than the new planets, and much closer. We'll do all the work of supplying water and air, build 10 000 mansions for the inhabitants and guarantee a lifetime supply of food. I'm hoping for a spotters fee of 0.01 per cent.

On a related point, what should we be wishing for here? The fact that no-one has sent a detectable signal in our direction suggests that intelligent life forms similar to humans are very rare. If habitable planets are very rare, then this is unsurprising - interstellar distances preclude both travel and any kind of two-way communication. If on the other hand, the emergence of intelligent life is common, then the evidence suggests that its disappearance, through processes like nuclear war, must also be common.

[^1] Where Earth-like means somewhere between Venus-like and Mars-like.

Young people these days

by John Quiggin on May 5, 2013

Apparently, a new survey shows that Millennials (more precisely, US high school students interviewed between 2005 and 2007, and therefore born in the early 1990s) are lazy and entitled. More precisely, as textbook worker-consumers are supposed to, they would like nice stuff, but not if they have to work long hours to get it. I’m too bored to link to it, but you can easily find it.

The best that can be said for this kind of thing is that it relieves the monotony of boomer-bashing. Apart from that it is a repeat of the formulaic denunciation of adolescents that has been applied (in my memory) to Gen Y (insofar as this group differs from the Millennials) Gen X (Slackers), Boomers (hippies) and the Silent Generation (the original teenagers). Then there were the Lost Generation and so on back to the (apocryphal, I think) rant often attributed to Socrates. Only those who have the good fortune (?) to come of age in a time of full-scale war miss out on this ritual denunciation.

On a brighter note, Jocelyn Auer restates the reasons why treating generations as coherent groups is silly. As she says, the situation of the wealthies 20 per cent of boomers is much different from that of the bottom 20 per cent, looking forward to retirement with little or no super, and worse if they don’t own their home. A neat point, true of almost any attack on people based on their age, is that the attackers can’t lose. Boomers who retire early are a burden, while those who work past 65 are keeping younger people out of a job. Similarly, young people are coddled if they are full-time students, dropouts if they start work early and neglecting their studies if they combine schoo//uni with a part time job.

Gallipoli and Crimea

by John Quiggin on April 26, 2013

Yesterday was Anzac Day, the 98th anniversary of the beginning of the disastrous Dardanelles campaign, in which Australian, New Zealand and British troops assaulted Gallipoli in Turkey. Here’s what I posted on my blog.

Thinking about Anzac Day, with the inevitable mixed emotions, I was struck by tihe resemblance of the Anzac legend to that of the Charge of the Light Brigade in the Crimean War – the same incredible bravery of ordinary men commanded by bungling leaders to undertake a doomed and futile mission.

There’s another, even more tragic, echo here. Both the Crimean War and the Gallipoli campaign arose from the same cause – the decline of the Ottoman Empire, and the struggle over its partition. But in the Crimean War, the British and French were on the side of the Turks against the Russians. In the Great War, the imperial alliances had shifted, and the Russians formed part of the Triple Entente, while the Turks were on the side of the Germans.

Whatever the justice of the Allied cause in the Great War as a whole, the war with Turkey was nothing more than a struggle between rival imperialisms. The British and French governments signed secret treaties with each other, and with the Russian Czar, promising to divide the spoils of victory. At the same time, they made incompatible promises of independence for the Arabs and of a homeland in Palestine for the Jews.

There are no consolations to be had here. The Great War did not protect our freedom, or that of the world. Rather, it gave rise to the horrors of Nazism and Bolshevism, and, within Turkey, to the Armenian genocide. The carve-up of the Ottoman empire created the modern Middle East, haunted even a century later by bloodshed and misery.

As we reflect on the sacrifices made by those who went to war nearly 100 years ago, we should also remember, and condemn, the crimes of those, on all sides, who made and carried on that war.

Lest we forget.

Running v walking

by John Quiggin on April 24, 2013

With the exception of an unnameable region bordering on the Eastern Mediterranean, posts on diet and exercise seem to promote more bitter disputes than any others. So, in the spirit of adventure, I’m going to step away from my usual program of soft and fluffy topics like the bubbliness of bitcoins, the uselessness of navies and the agnotology of climate denial, and tackle the thorny question of running vs walking.

Happily, and unlike, say climate science, this is a question on which you can find a reputable scientific study to support just about any position you care to name, and even some that appear to support both sides, so I’m just going to pick the ones I like, draw the conclusions I want, and invite you all to have it out in the comments thread. I’m also going to attempt the classic move of representing the opposing positions as extremes, relative to which I occupy the sensible centre.

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Bitcoin: the perfect bubble

by John Quiggin on April 17, 2013

Over at the National Interest, I have a piece arguing that Bitcoin is a more perfect example of a bubble, and therefore a more perfect refutation of the Efficient Markets Hypothesis, than anything seen previously. Key quote

It beats the classic historical example, produced during the 18th century South Sea Bubble of “a company for carrying out an undertaking of great advantage, but nobody to know what it is.” After all, the promoter of this enterprise might, in principle, have had a genuine secret plan. Bitcoin also outmatches Ponzi schemes, which rely on the claim that the issuer is undertaking some kind of financial arbitrage (the original Ponzi scheme was supposed to involve postal orders). The closest parallel is the fictitious dotcom company imagined in Garry Trudeau’s Doonesbury, whose only product was its own stock.

1975 and 2013

by John Quiggin on April 9, 2013

There’s already plenty of commentary, here and elsewhere on Margaret Thatcher. Rather than add to it, I’d like to compare the situation when she assumed the leadership of the Conservative Party with the one we face now. As Corey points out in his post

In the early 1970s, Tory MP Edward Heath was facing high unemployment and massive trade union unrest. Despite having come into office on a vague promise to contest some elements of the postwar Keynesian consensus, he was forced to reverse course. Instead of austerity, he pumped money into the economy via increases in pensions and benefits and tax cuts. That shift in policy came to be called the “U-Turn.”
Crucially, Heath was defeated mainly as a result of strikes by the coal miners union.[1]

From the viewpoint of conservatives, the postwar Keynesian/social democratic consensus had failed, producing chronic stagflation, but the system could not be changed because of the entrenched power of the trade unions, and particularly the National Union of Miners. In addition, the established structures of the state such as the civil service and the BBC were saturated with social democratic thinking.[2]

Thatcher reversed all of these conditions, smashing the miners union and greatly weakening the movement in general, and promoting and implementing market liberal ideology as a response to the (actual and perceived) failures of social democracy. Her policies accelerated the decline of the manufacturing sector, and its replacement by an economy reliant mainly on the financial sector, exploiting the international role of the City of London.

Our current situation seems to me to be a mirror image of 1975. Once again the dominant ideology has led to economic crisis, but attempts to break away from it (such as the initial swing to Keynesian stimulus) have been rolled back in favour of even more vigorous pursuit of the policies that created the crisis. The financial sector now plays the role of the miners’ union (as seen in Thatcherite mythology) as the unelected and unaccountable power that prevents any positive change.

Is our own version of Thatcher waiting somewhere in the wings to take on the banks and mount an ideological counter-offensive against market liberalism? If so, it’s not obvious to me, but then, there wasn’t much in Thatcher’s pre-1975 career that would have led anyone to predict the character of her Prime Ministership.

fn1. I was too far from the scene to be able to assess the rights and wrongs of these strikes or the failed strike of the early 1980. It’s obvious that the final outcome was disastrous both for coal miners and for British workers in general, but not that there was a better alternative on offer at the time.

fn2. The popular series, Yes Minister, was essentially a full-length elaboration of this belief, informed by public choice theory

Mainstreaming utopia (updated)

by John Quiggin on March 26, 2013

The final post in our seminar on Erik Olin Wright’s Envisioning Real Utopias is by Marc Fleurbaey, with the collaboration of his seminar students Inka Busack, Joaquin Garcia, Jacob Girard, Kathryn Long, Anthony Sibley, Jiemin Wei.

There are many details of the book which could be commented upon and praised or criticized, but this short text will focus on three questions which appear central in the Real Utopias project.

  • Why focus on capitalism versus socialism?
  • What role for market transactions?
  • What is the status of utopian research?

A final version of the response is now available here

One of the examples of real utopia put forward by Wright is the idea of a Universal Basic Income (UBI). In its simplest, and arguably most utopian form, the idea is that every member of the community would receive a payment sufficient to sustain a decent standard of living. Implementing a UBI in this fashion would pose a huge, arguably insuperable, financing challenge in the context of a market economy. The same isn’t obviously true of a closely related idea, a guaranteed minimum income (GMI)
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I can’t say that Erik Olin Wright’s Envisioning Real Utopias provided me with any particular, brilliant insight, and I suppose someone better read in social theory or analytical Marxism than I might have found parts of the book belabored. Even I would agree that it was often repetitious, though I think I think Russell Jacoby was simply talking nonsense when he called the book a
“morass.” Overall though, nearly three years since I first read it, I still consider it a masterful work. Wright’s case for separating the socialist project from the conceptual apparatus of traditional Marxism—from its theory of history to its necessarily revolutionary implications—in favor of a “compass” which orients us as we move down numerous different, possibly hybrid routes, towards a greater level of social power and democratic egalitarianism, was entirely persuasive to me. Of all those routes, the one which most intrigues me is one which invites reflections that are rarely identified as “socialist,” but more usually localist, communitarian, even Burkean (hence my title of this review). But let me come around to that conclusion the long way.

Full piece is here

Envisioning Real Utopias: response from Bill Barnes

by John Quiggin on March 23, 2013

I’m going to talk about Wright’s complete failure to say anything about the herd of elephants in the room that completely blocks our way toward any of the desirable futures that the book envisions – climate change, environmental degradation, resource depletion, and their epidemiological, social, economic and political consequences. That Wright did not recognize this in the course of his five years of work on, and world-wide presentation and discussion of, the book’s arguments, mid 2004 to mid 2009 (pp. xi-xv– “I felt that I was part of a global conversation on the dilemmas of our time,” xv) – that in all those presentations and discussions no one ever raised the climate change/environmental degradation issues with sufficient force as to leave a footprint in the 2010 text – despite the scientific evidence and argument that was accumulating during those same years – that is very telling – a sign of our historic failure in meeting our responsibilities as intellectuals – one mark of the current world-historical failure of the social and policy sciences in general, of intellectuals at large, and of the modern state.
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By page 3 of Envisioning Real Utopias I was already disappointed. The Introduction starts with some examples of real utopias – they are participatory city budgets (ok, promising – new to me); Wikipedia (never, ever trust it on living people, or anything controversial); and Mondragon (always Mondragon – is this really still the best example of co-operative production? It was always cited when I was a student in the late 1970s).

So are there better examples of ‘real utopias’, or rather idealism put into practice? Yes. From the anti-globalisation movement, Slow Food and Fair Trade. A bit of a revival of local currency schemes, the Bristol pound being one of the most recent and biggest. The campaign for a Living Wage, backed by anti-poverty bodies like the Joseph Rowntree Foundation.
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