World Economy

Jeffrey Sachs, William Easterly (and Bono for that matter) can stop their bitching, Christopher Hitchens has an explanation for a good deal of global destitution:

… the mass murder of people on aeroplanes is a leading cause of poverty.

If only Larry Summers were still in post, he could have offered Hitch a job. (shamelessly stolen from Marc Mulholland ).

Via Dan Drezner, this fun little article by James Surowiecki in the New Yorker.

Airbus’s woes are being held up as proof that it is, in the words of one columnist, “a textbook example of how not to run a commercial enterprise.” The Wall Street Journal explained that Airbus was failing because of its “politicized management,” while the Times suggested that Airbus had to decide whether it was a company or a European “employment project.” … What much of the talk about the inherent weakness of Airbus ignores is that, just a few years ago, it was Boeing that looked fundamentally flawed, while Airbus was seen as the future of the industry. … The problem with such prognostications is that they infer basic truths about a company’s prospects from its short-term performance. … People are generally bad at accepting the importance of context and chance. We fall prey to what the social psychologist Lee Ross called “the fundamental attribution error”—the tendency to ascribe success or failure to innate characteristics, even when context is overwhelmingly important. … Because we underestimate how much variation can be caused simply by luck, we see patterns where none exist. It’s no wonder that management theory is dominated by fads: every few years, new companies succeed, and they are scrutinized for the underlying truths that they might reveal. But often there is no underlying truth; the companies just happened to be in the right place at the right time.

This applies not only to judgements about the success of companies, but to judgements about the success of countries. A few years ago, the political scientist Peter Katzenstein went through a couple of decades worth of those special issues that the Economist runs on particular countries for his own amusement. He found that there wasn’t any long term consistency in judgement – a country cited as a model of how to create a thriving economy in one special issue might be cited as a prime example of political dysfunction the next time round, and back in the good books a few years later. This isn’t a problem that’s specific to the Economist; it’s a more general one of how the political wisdom on the sources of economic success is incredibly unstable. A couple of decades ago, the shelves were filled with books on Japan Inc., and nasty xenophobic bestsellers like Michael Crichton’s Rising Sun claiming that Japan was going to gobble up America unless it fought back. Before that, there was a lot of talk about Modell Deutschland as the way forward. Und so weiter. We don’t know very much at all about the root reasons why economies succeed or fail, for some of the reasons that Surowiecki cites. Countries too can happen to be in the right place at the right time, and may find their luck running out unexpectedly when conditions change.

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.

Via Jim Gibbon I’ve discovered Gapminder. Wow! It’s a wonderful visualization tool for data. The focus is on world development statistics from the UN. The tool is incredibly user-friendly and let’s you play around with what variables you want to see, what you want highlighted in color, whether you want to log the data, what year you want to display, and whether you want to animate the time progression (oh, and how quickly).

I’ve made an example available on YouTube. (I used Gapminder to create the visualization and Hypercam to capture it.)

Here is some context for that particular graph. My first interests in research on Internet and social inequality concerned the unequal global diffusion of the medium. I wrote my senior thesis in college on this topic and then pursued it further – and thankfully in a more sophisticated manner – in graduate school. So this is a topic that has been of interest to me for a while and it’s great to be able to play with some visual representations of the data.

So what you have on the video graph is a look at Internet diffusion by income (logged) from 1990-2004. I picked color coding by income category, which is somewhat superfluous given that the horizontal access already has that information, but I thought it added a little something. (For example, to summarize the puzzle of my 1999 paper – the first to run more than bivariate analyses on these data -, it focused on explaining why all the red dots are so widely dispersed on the graph despite all representing rich long-term democratic countries.)

Thanks to the tool’s flexibility, you can change it so that the color coding signifies geographical region and could then tell immediately that what continent you are on – an argument some people in the literature tried to make – has little to do with the level of Internet diffusion.

Imagine the possibilities of all this in, say, classroom presentations. Jim links to a great presentation using this tool. (Although I disagree with the presenter’s conclusion at the end about the leveling of differences regarding Internet diffusion.)

I recommend checking out the tool on your own for maximum appreciation of its capabilities.

UPDATE: There is more! Conrad – Jim’s source on this – tells me that the tool on the Trendalyzer site has even more option. Moreover, you can download a beta version of the software that even lets you import your own data.

I want to flag an issue which I seem to have noticed in a variety of liberal egalitarian writings on global justice, namely the cut that philosophers and theorists often make between entitlement to land and natural resources on the one hand, and entitlement to socially created stuff on the other.[1] Liberal egalitarians usually reject any kind of libertarian finders-keepers principle with respect to the first category of goods. But in relation to the second, they often argue for the right of insiders to exclude outsiders from access to those goods that are the collective historical creation of the insiders’ political entity.[2] What follows is just a bit of thinking aloud: there are a lot of uncrossed ts and undotted is. I’d welcome both constructive comments and pointers to relevant papers.

This natural/social cut looks wrong and insufficiently motivated to me. With respect to natural resources and land, I guess the background thought might be that these resources come as manna from heaven, as it were, so that all of the worlds people and peoples have an original equal claim to them. We can then argue about the right way of progressing from that claim to operational property rights, but it is easy to see how arguments for (e.g.) something like a global resources dividend can go: those who actually use the resources need to compensate the others who share their original equal entitlement for that use.[3] The difficulty I see is this: that social resources also come as unequally distributed manna from heaven to each new generation. Those who inherit stable institutions, a culture conducive to economic growth etc., look to be just as arbitrarily lucky with respect to those resources as those (Norwegians for example) who are lucky with respect to the discovery of natural resources on their territory. So why not deal with the two kinds of resources in the same way: that is, initially posit an equal original right of all to ownership, and sanction transfers to those who have been comparatively unlucky in the initial distribution?

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At the end of last week, I attended the conference on “Equality and the New Global Order” at the Kennedy School of Government that I had mentioned here. The extremely impressive list of speakers lived up to the high expectations. I have written up some fairly extensive notes below. However, they are based on my recollections and notes, not any recordings or transcripts, so please don’t quote from these or rely on their accuracy – if you’re interested in pursuing these issues, many of the papers are available here.
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On May 11-13, the Kennedy School at Harvard will be hosting a conference on “Equality and the New Global Order.” The three days are organized around “Foundational Questions,” “Institutions,” and “Global Public Health.” The tentative schedule is very impressive. Versions of several of the papers are now available – I’m guessing more will be put up over the next two weeks. The talks are free and open to the public. I’m going to try to make some of the sessions, so please say hello.

An entertaining howler at the Economist this week; one of its leaders has the grand title:

From Karl Marx’s copybook: Efforts to block foreign takeovers rest on a deceit about ownership and interests

and continues:

PATRIOTISM, said Samuel Johnson, is the last refuge of a scoundrel. That may be unfair to the proper sort of patriot, but it would be an entirely valid comment about politicians today who make a fuss about foreign takeovers in their countries, in the name of “national interests”. The truth is that they are not defending their nations’ interests at all. They are defending their own interests and (often) those of their cronies.

Rather unfortunately for the leader writer, who seems never to have read Marx, there’s no support in Marx’s writings for economic patriotism or for defending national interests. Indeed, if you care to consult the man’s works, Marx was enthusiastically in favour of the bourgeoisie’s penchant for ripping down barriers to international exchange. From the Communist Manifesto:

The bourgeoisie has, through its exploitation of the world market, given a cosmopolitan character to production and consumption in every country. To the great chagrin of reactionaries, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

Now, of course, “Karl Marx’s copybook” stands in the leader-writer’s vocabulary for “vaguely left-sounding ideas that I don’t like and want to discredit by association.” But Karl Marx’s actual copybook would suggest that if anyone’s ideas are to be discredited by association with the work of disreputable lefties here, it’s those of the Economist (not that I personally consider Marx to be a disreputable leftie, of course, but I do enjoy seeing a lazy attempted smear boomerang right back into the face of the smearer).

Hot off the presses. No idea when I’ll have time to read it, on account of me being so ‘time poor’ that I may as well have a peptic ulcer.

I’m running around all day today, but no time to wait with this post: I want to recommend Lifetime’s Human Trafficking mini-series. It aired last night (in the U.S.), but the first part will be replayed early this evening before the second part is shown.

The NYTimes quotes an immigration and customs official from the movie:

An ounce of cocaine, wholesale: $1,200, but you can only sell it once. A woman or a child, $50 to $1,000, but you can sell them each day, every day, over and over and over again. The markup is immeasurable.

The movie is well done in many ways, I recommend it.

One question I’m left with is the best ways to educate people, and especially children, about all this. A movie like this is helpful, but it’s not clear how a 12-year-old would deal with it. And then there are areas where showing such a movie is not even an option.

The NYTimes piece has a synopsis of the first part in case you can’t spend four hours on this tonight.

I’m just back from Germany where I’ve been to a very interesting interdisciplinary workshop at the University of Bremen ’s Sonderforschungsbereich Staatlichkeit im Wandel on Trade Governance, Democracy and Inequality. As usual in such cases, the bringing together of philosophers and practitioners was both stimulating and revealing of how little we know about one another. Starting my own, basically normative, paper, I asserted that a central purpose of trade rules should be to promote justice. I was informed that “justice” was one word that would never pass the lips of a WTO negotiator. Which, doesn’t show, of course, either that I’m wrong about what should happen or that concerns about justice aren’t lurking in the shadows somewhere. But it suggests a startling disconnect between the public rhetoric about global inequality and the concerns at the negotiating table.