Crooked Timber

Over at our joint I’ve been doing a fair bit of “this day seventy-five years ago” because of the anniversary of Roosevelt’s hundred days and, well, because. This one may hold some interest for an international readership:

On this day in 1933, British Prime Minister Ramsay MacDonald delivered an address from the National Press Club in Washington, DC, discussing the common problems of the US and UK: “In America at this moment and in Great Britain there are millions of men who want work and can’t get it…. Governments cannot be indifferent to a state of things like that.”

MacDonald looked forward to “wise international government action,” to be established at the upcoming international economic conference. He hoped it would revive “a freely flowing international exchange,” i.e., trade—“Self-sufficiency in the economic field on the part of nations ultimately ends in the poverty of their own people.”

He was mindful of the apparent irony in Britain’s having taken the nationalist, defensive action of going off the gold standard: “Can you imagine that in the early days of that crisis we said gayly and light-heartedly, ‘Let it rip. Let it rip. We will go off gold. There are benefits in being off gold, and we will reap them.’” Obviously he meant the answer to be “no.”—“And so on this currency question, agreement is the only protection.”¹
Continue reading ““Let it rip.””

Tonight’s selection goes with last night’s. Late 1860’s US SF. Ergo, for fun, another Lulu edition.

"No," said Q. bravely, "at the least it must be very substantial. It must stand fire well, very well. Iron will not answer. It must be brick; we must have a Brick Moon."

Along with The Epic of Gilgamesh and The Three Little Pigs, Edward E. Hale’s "The Brick Moon" (1869) is one of the three great brickpunk classics of world literature.

Sandemanian technopreneurs look to the bold, bricks & mortar future, with a flywheel-launched, satellite-based global positioning system; but learn valuable life lessons instead.

Brick. It’s awesome stuff.

"The Brick Moon" was originally serialized in The Atlantic Monthly. And there is an interesting thematic connection with the Steam Man, above and beyond the nigh simultaneous publication. Apparently the inspiration for the Steam Man was – the BigDog of its day – this. "However, by observing carefully the cause of failure, persevering and perfecting the man-form, and by substituting steam in place of the perpetual motion machine, the present success was attained." Words to live by.

As I was saying, in "The Brick Moon", our protagonists are likewise weaned off unreal dreams. "Like all boys, we had tried our hands at perpetual motion. For me, I was sure I could square the circle, if they would give me chalk enough." Then, having put away childish things, they are soon enough hyrodynamically flywheeling tons of bricks into the lower atmosphere.

Here’s a free PDF.

Arguably, this version of the three little pigs is even better.

If you are more old school, here’s Gilgamesh: "Go up on the wall of Uruk and walk around, examine its foundation, inspect its brickwork thoroughly. Is not (even the core of) the brick structure made of kiln-fired brick, and did not the Seven Sages themselves lay out its plans?"

Brick. Awesome.

Some of the things that are most interesting to international political economy scholars such as meself are notoriously difficult to measure. To take one example, there’s a lot of muttering in the US and elsewhere about international trade, whether multilateral and bilateral trade deals are good or bad for the US economy, and so on (these debates also have close equivalents in Europe and elsewhere). But how to cut through the hype to figure out whether or not there is a real likelihood of change in the current regime or not? The usual approach is to look for an indicator variable of some variety that will allow you to track underlying processes that you can’t directly measure. I think I’ve found one – and it’s at least as good as the Economist’s famous Big Mac index for figuring out shifts in PPP. My claim is that the degree of rhetorical overkill in Jagdish Bhagwati’s op-ed fulminations on trade is a very good indicator of what the free trade establishment actually thinks about the underlying risks or threats to the existing regime, and (to the extent that this establishment is politically plugged in) a plausible leading indicator of what’s likely to happen in the future. I’ll endeavour to test this hypothesis by keeping track of the Bhagwati Blood Pressure Index (or BBPI) over a period of time, and testing whether it maps well onto the expected outcomes.

Bhagwati’s piece in today’s FT is a good place to start. Those unfamiliar with his writing style might think that language such as “faintly ludicrous,” “denigration of freer trade,” “witless fear of trade,” and “disturbingly protectionist” indicates a BBPI that is alarmingly high, both for free trade and for Professor Bhagwati. Comparative analysis with previous op-eds and writings would suggest, however, that these criticisms are almost genial by historical standards; at worst they’re love taps. By my reading, the BBPI has dropped quite significantly since mid 2007 or so, suggesting that the free trade establishment believes that the current fervor over free trade is froth that will mostly disappear after the primary season. On the evidence of this article, we may expect the BBPI to drop still further if Barack Obama is elected President (one presumes that Bhagwati believes Austan Goolsbee’s representations to the Canadian government), but to rise substantially in the unlikely event that Hillary Clinton snatches the crown. Also of interest is the evidence that the article provides on the mental modelling processes that underlie these empirical predictions:

whereas Mr Obama’s economist is Austan Goolsbee, a brilliant Massachusetts Institute of Technology PhD at Chicago Business School and a valuable source of free-trade advice over almost a decade, Mrs Clinton’s campaign boasts of no professional economist of high repute. Instead, her trade advisers are reputed to be largely from the pro-union, anti-globalisation Economic Policy Institute and the AFL-CIO union federation.

Clearly then, your soundness on trade depends on the extent to which your campaign employs economists whom Professor Bhagwati approves of. I suspect that Hillary’s campaign is doubly damned because it’s supported by Paul Krugman (whom professor Bhagwati condescendingly refers to as an apostate ‘former student’). Nor had I hitherto realized that the economists of the ‘pro-union, anti-globalisation Economic Policy Institute’ were unprofessional economists of little repute; silly me.

Update: Megan McArdle suggests that a basket of pundits would be preferable.

I’ve been too busy with teaching responsibilities the last several days to link or respond to various posts that other people have put up on taxes, collective goods, and related questions, so I’m going to declare intellectual bankruptcy, and just tell you to read Laura McKenna, Will Wilkinson and Russell Arben Fox. But I also wanted to point to some interesting stuff that’s been happening in Germany, which is sort of related to this question. The Financial Times has been running stories for the last week or so about a disgruntled former employee of a Liechtenstein bank, who has sold a list of the beneficial owners of various trusts in Liechtenstein to the German tax authorities for several million dollars.
Continue reading “Double movements”

Martin O’Neill has an interesting review of a new book about Starbucks.

In the centre of Xi’an, the ancient Chinese capital, there is a gleaming concrete and glass Starbucks. Although a caramel macchiato costs more than a slap-up lunch for four in any of the city’s traditional cafes, this has not stopped it from doing brisk business.

Read the whole thing, as they say.

Here are the things most people would happily pay for at an international transit airport: – a shower – clean underwear (for those of us who habitually forget to pack it) – daylight – an exercise facility to help with the jetlag and minimise DVT – nutritious but not too heavy food – a nap, lying flat, somewhere quiet.

And here’s what is generally available: – Gucci – Chanel – l’Occitane – Bodyshop – Lacoste – Nike – a few plastic seats – McDonalds, dougnuts, and the local variety of fried, sugary dross to add a sugar hangover to your jetlag.

Sometimes there’s a shower, and I’ve even heard of napping capsules – though never in the terminal I’m in. But generally, the big transit airports totally mismatch the actual desires of travellers, and instead lay on miles of the same over-priced globalised tat (Swarovski, anyone?) for the miserable and jetlagged to wander about in.

Is the idea that we’ll buy a Cartier watch because we’re so tired and addled? Or are ‘we’ such wealthy and time-poor businessmen that we’ll buy any shiny expensive thing we see for our neglected wives and mistresses? At Bangkok airport recently, most of the travellers were wearing tracksuits and carrying babies. Chanel, Prada and the rest of them were completely empty. Though at least there are showers and a spa in that airport. But all I wanted to buy was clean knickers and a mobile phone – and the result was 2-nil to the airport. At least I didn’t succumb to those silk and wool scarves they have in every airport in the world, but that only French women wear.

So why the complete mismatch of trapped and exhausted consumers to luxury goods? Surely the airports have woken up to the fact that travelling is mass market. Or are travellers such a captive market that airports can completely ignore what they actually want…?

This unashamed mash note from Bill Emmott, former editor of the Economist presents a class of a triple-distilled tincture of the prevailing globollocks on Sarkozy’s victory in France. You don’t need to read the actual column to get the gist; just the Pavlovian dinner-bell talking points that it strings together.

France … paralyzed by powerful interest groups … political elite … beholden … or … afraid … takes a brave outsider … precisely Sarkozy’s appeal … Reagan or a Thatcher … A “rupture” is what France needs … showing that his country is not doomed to decline … cadres of highly globalized managers … etc … etc

Bits and pieces from elsewhere on the WWW in lieu of a proper post.

Via Tyler, I see that Dani Rodrik now has a blog. And has just won the first Albert Hirschman prize, which sounds to be an excellent institution, honoring “scholars who have made outstanding contributions to international, interdisciplinary social science research, theory, and public communication. Hirschman is notoriously a prophet without honour in his own discipline; he’s far more widely read by sociologists (see Kieran’s article with Marion Fourcade for further discussion) and political scientists than by economists.

Cory Doctorow is turning out, in the best of all possible ways, to be an uncomfortable guest at the University of Southern California. There’s a lot more background in this interview he did with the Chronicle a few weeks back, which I meant to link to at the time, and never quite got around to. More on this later today or tomorrow.

This bit at Chris Hayes’ blog (which you should all be reading) is thought provoking:

My friend Nick Reville once said something about public libraries that has always stuck with me. “If libraries didn’t already exist, there’d be no way they could ever come into existence now. Can you imagine telling the publishing industry that the government was going to pay to set up buildings where they gave away their product for free?” That’s as good a summary of our current political-economy as any.

My friend Scott Kaufman asked me to point you to the book event The Valve is hosting on Amanda Claybaugh’s The Novel of Purpose. He was even considerate enough to write this post for me—links and all! [Though, truth to tell, I did edit it a little bit. And the fact that I am saying as much in brackets shows that there are limits to how much control of the author function I will give up.—sm]

Miriam Burstein has already thrown her hat into the ring. And Scott [SEK, that is, not me-sm]* has written a briefer on the context in which Claybaugh’s book is, as we say in the [academico-litcrit] biz, “intervening.”

So if you find the 19^th century, social reform, literary realism or the works of Dickens, Bronte, and Twain at all interesting, I [or we? something like that-sm] suggest you check it out.

• [this is kind of like “Temptation Inside Your Heart” on the “lost” Velvet Underground album which has a couple of tracks of Lou Reed commenting on the song and arguing with his own commentary: “I can talk to myself if I want to….”-sm]

A new bloggingheads between Dan Drezner and meself is up, in which, as the blurb puts it, “Dan and Henry analyze Bh.tv’s new business model and then defy it by failing to yell at each other.” One of the topics we discuss is the economic future of the EU, and Andy Moravcsik’s recent article on it. As a slightly belated EU 50th birthday post, and an addendum to my previous disagreement with Andy, I’d like to point to this brand new paper (pdf) by Martin Höpner and Armin Schäfer at the Max-Planck Institut in Cologne. The take home point is that the EU’s market integration processes aren’t neutral and technical, as they are often described as being, but are instead highly political, and have adverse consequences for coordinated market economies. This feeds into the EU’s legitimation problems.

Deregulating the economy is a genuinely political decision that cannot be left to independent agents. … Whether the member states need a ‘neo-liberal’ corrective is not for the observer to choose but must be the result of public deliberation and parliamentary decisions – otherwise, the price to pay is a serious democratic deficit. However, instead of a strengthening of input-oriented legitimacy, we witness ongoing – yet increasingly unsuccessful – attempts to de-politicize EU politics. European-level actors transform essentially political matters into apparently technical ones. An extensive interpretation of the ‘four freedoms’ of the European Treaty allows Commission and Court to enforce
liberalization measures juridically. The law shields these attempts from political resistance especially in organized economies.

Which leads me to wonder, after having read Dani Rodrik’s critique of the cheerleaders of globalization in the FT yesterday whether the EU isn’t being badly misinterpreted by outside observers, especially in the US. The usual claim that one reads is that the EU’s problems are the problems of creaking economies refusing to modernize, rejecting sensible proposals such as the original, tougher form of the Services Directive etc. But can’t this be interpreted from the other direction? Couldn’t one reasonably argue that the near-stalling of the EU’s market integration process demonstrates how over-strident efforts to deregulate are liable to result in political stalemate and backlash from an increasingly truculent public? In short, can’t the EU’s political problems be interpreted not as a failure of the European social state, but as a demonstration of the political limits of attempts to introduce global deregulation, free trade in services und so weiter without real public discussion?

Now that oil has been discovered off the coast of Cuba, I may eventually be deprived of my best come-back to those lefties who oppose anything that could be called “globalization” but who also complain about the U.S. embargo of Cuba. But the more interesting question will be the reaction of Republicans who will be torn between their love of all things oily and hatred of all things Cuban (post-1959). Some possibilities:

1. Suddenly realize that the embargo isn’t working and end it;
2. Suddenly realize that the embargo isn’t working where oil is concerned – end it for oil, but keep it in place for everything else.
3. Dispute Cuba’s territorial claims where the oil was found;
4. Escalate – either blockade or at least stop suspending enforcement of title III the Helms-Burton amendment [pdf] until Cuba is a democracy like Saudi Arabia;
5. Really escalate – invade Cuba (beyond Guantanamo Bay) or some other country, related or not – I’m thinking Venezuela;
6. Keep very quiet about this and hope Castro dies soon and declare success no matter what the replacement regime looks like.

The early front-runner seems to be 2, with hints of 3, and of course 6 is an old standby.

I wish Daniel would post more on CT and less on the Guardian’s Comment is Free site, partly because I worry that regular CT readers may sometimes miss his pieces. Today he has a really interesting article arguing that agricultural subsidies aren’t always bad for the global poor and, indeed, by lowering prices for Africa’s consumers, may often be good for them. That definitely goes against the conventional wisdom (both left and right) in blogdom. Definitely worth a read.