December 01, 2004

International AIDS day

Posted by Chris

I’ve been looking through the headlines on international AIDS day. The BBC discusses the disproportionate impact on women in Africa . India has 5.1 million people infected with HIV , and nobody really knows how many victims there are in China (CNN). “HIV and Aids are expected to kill 16 million farm workers in Southern Africa by 2010” reports the South African Independent Online . In Britain the Guardian tells us that a fifth of respondents to a poll blame the victims. In Lebanon , only a quarter of victims receive any kind of treatment. In Uganda a government minister warns the UN not to give advice to gays on safe sex because homosexuality is illegal. Please add more links in comments throughout the day.

August 25, 2004

The other deficit: Part II

Posted by John Quiggin

In my previous post on US trade, I argued that if the current account deficit is to be stabilised at a sustainable level, the balance of trade on goods and services must return to surplus in the next decade or so. In this post, I’m going to ruIe out a soft option and argue that, while a smooth market-driven adjustment is not inconceivable, it’s unlikely.

The soft option is the idea that central banks will keep on buying US dollars indefinitely in order to keep the world trading system indefinitely, and that the US can therefore consume as much as it wants, subject only to the capacity of the Treasury to keep printing dollars. This option is not a goer for both economic and geopolitical reasons. On the economic front, there comes a point when the risk of being left with a pile of worthless paper exceeds any benefits from being able to export goods.

On the geopolitical front, there’s no point in spending hundreds of billions of dollars a year becoming a military hyperpower if you’re going in to hock to your rivals/potential adversaries for a similar amount. On current trends, the Chinese central bank will hold the better part of a trillion dollars in US government bonds in a few years time. Should there be any minor unpleasantness on the foreign policy front, nothing would be more natural than for the Chinese to stop buying a bit and diversify some of their existing holdings, say a hundred billion dollars or so, into yen and euros. At this point, Wall Street and the Treasury would demand immediate capitulation.

There are also various private sector versions of the soft option, based on the idea that foreigners desperately want to hold US assets, but none of these will stand up to the pressure of chronic trade deficits. As other countries have found out, relying on hot money to finance chronic deficits guarantees a crisis of confidence sooner or later.

If the soft option is ruled out, we’re left to consider paths by which the US can return to trade surplus. Currently the US exports about half as much as it imports. The imbalance could be reduced in a number of ways

  • A (further) devaluation of the US dollar
  • Reductions in US wages relative to those overseas
  • Increases in US relative to foreign productivity (the relevant concept here is multifactor productivity, taking account of both capital and labour inputs)
  • Reductions in US consumption relative to foreign consumption

To get back to balance or surplus in a decade, and without a crisis, no one of these would be sufficient. For example, to get to balance by devaluation alone would require a devaluation of the order of 50 per cent, which would certainly entail both an upsurge in inflation and an increase in interest rates. A lot of emphasis is (rightly) put on productivity but even on the most optimistic accounts, the gap between the US and other countries is no more than one percentage point per year, which is nowhere near enough. About 40 per cent of the marginal dollar goes on imports, so the restoration of balance through increased household saving alone would require an increase in saving equal to something like 12 per cent of GDP, and this seems most implausible.

If the adjustment were to begin almost immediately and everything went right, it could go smoothly. But the odds against this seem long. So it’s worth considering alternatives.

August 23, 2004

Starbucker

Posted by John Quiggin

I found this story of globalisation and soft power at charlotte street, via bertramonline. As bertram says, you can’t make this kind of thing up.

I had a look at related issues in this piece

May 26, 2004

Rights-based lending in action

Posted by Daniel

Further to my comments last week on this subject, an update on Mr Wolfensohn’s progress toward the holy grail of Rights Based Lending. As of yesterday, China has a “winning formula” that the rest of the world ought to copy, while Israel can go screw itself. Something for everyone here, I think.

(The second of those two links is, IMO, disgraceful. Lord knows I’m not exactly a fan of the actions of the State of Israel in the territory it has annexed, but where the heck does Wolfensohn get off deciding to have a Middle East policy? Note that his comments appear to have no relevance to the action project involved; the Gaza Palestinians are just going to be made to wait for their new houses because of Wolfensohn’s amour propre, “as a Jew”. OTOH, it looks like he flip-flopped again shortly after that Ma’ariv interview and the discussions are still live after all. Lord, what a clown show)

April 23, 2004

Industrial policy for me but not for thee

Posted by Daniel

I realise that this is about the fourth time I’ve had a hit-and-run shot at an Airmiles column, while crying off doing the proper Globollocks analysis for lack of time. I am a bit short of time at the moment, but the real reason is thatit’s so dispiriting; the general miasma of Globollocks overwhelms any specific instance. Check out today’s example.

Friedman believes that it would be a danger to the USA on a par with global terrorism if someone in India working for a US-owned firm were to invent something useful. Think I’m joking? Read the bugger. He actually uses the phrase “war for innovation”.

Apparently the USA isn’t bringing through enough research scientists. What’s the solution? Presumably the rush to global competition of the free market. Nope, sorry, wrong, the solution is massive amounts of government money. In the Airmiles world, agricultural subsidies are terrible, awful anticompetitive, protectionist. But massive subsidies to the science industry are imperative, because of globalisation or something.

Wretched analysis. Someone has told Airmiles that “basic research” is a phrase meaning “science that it’s OK to want a subsidy for”. And he’s taken it as the intellectual equivalent of a Sapphire Class Admiral’s Club pass to support the contention that we need to incentivise domestic private research to keep its facilities onshore. What about “Susie Smith at the pillow factory?”, who would also presumably like a say in how this tax-funded largesse is to be distributed? Scrwe her, apparently; her role in Friedman’s weightless globalised world is a source of funds and a punchline to jokes. What a piece of work.

April 05, 2004

Exporting Globollocks

Posted by Daniel

Thomas Friedman of the New York Times has another attractively barking column up (potted summary: There’s nothing wrong with Mexico that couldn’t be cured with a combination of “real leadership” and vast amounts of money from America. Well I suppose it worked for Chile). But once more, he salts the sauce with plenty of good old Globollocks. Due to time constraints, I haven’t been able to carry out a full Globollocks analysis. But I picked up this gem, which will serve as an indicator of the sort of thing the New York Times will print these days.

On two previous occasions, I’ve caught Airmiles red-handed in possession of interesting facts about Mexico that weren’t true, so he’s gone onto the “always check” list. Which turned up the following little gem:
[life’s shit –dd] “… when you are an oil-rich country but you import energy from America because your constitution restricts foreign investment in the energy sector.”

Mexico imports energy from the USA? Do they? Do they really? Since the USA is a massive net energy importer from the world as a whole, it struck me as unlikely that the USA would be a net energy exporter bilaterally with one of its biggest trading partners.

Score one for me. As of 2000, when this handy guide was written, Mexico was the source of 9 per cent of the USA’s net energy imports.

2000 was a long time ago? Well yes. Because I’m more scrupulous than Airmiles, I checked up the very latest figures and crunched the numbers myself. Mexico was a net exporter of petroleum to the USA (1279k barrels/day) and a net importer of natural gas (261bn cubic feet in 2002). Mexico is a small net exporter of coal and net importer of electricity with respect to the USA, but the numbers are too small to be worth the Energy Information Authority writing down.

Using the quoted thermal conversion factors (1010 btu/cubic foot for natural gas exports and 5.865m btu/barrel for petroleum imports), I make that:

261 × 1,000,000,000 × 1010 = 263.61trn btu of natural gas net imported by Mexico from the USA during 2002

and

1279 × 1,000 × 365 × 5,865,000 = 2,737.99trn btu of petroleum exported by Mexico to the USA during 2002.

for

Net energy imported by the USA from Mexio of roughly two and a half quadrillion btus. Note that the only energy categories where Mexico is not a net exporter to the USA are electricity (in trivial amounts, I would guess most of which are attributable to the single town of Tijuana) and natural gas (where the amount imported from the USA about 20% of total demand). Mexico isn’t dependent on the USA to anything like the extent to which the USA is dependent on Mexico.

Cross-checking with the answers on page 283, I find that in 2001, in total, Mexico produced 9.35 qdrn btu of energy and consumed 6.00qdrn. This would imply that net exports to the USA in 2002 (c2.5qdrn btu for those keeping score) were about 73% of 2001 total net exports. Which seems ballpark.

So in other words, unless a) something utterly unusual happened in 2003 and b) Friedman has access to as yet unpublished statistics, his assertion that Mexico imported energy from the USA has to be regarded as “bollocks”.

But is it specifically Globollocks, or just the normal fear and hatred of the fact which characterises Airmiles’ work?

Yep, it’s Globollocks, on two counts. First up, we have “those poor capital-starved third-worlders”. Mexico is meant to be an energy importer “because its consitution restricts foreign investment in the energy sector”. In actual fact, the oil and natural gas fields in Mexico are owned by Pemex, the state oil and gas company. It’s the world’s eighth largest integrated oil and gas company, and a massive borrower on global capital markets. The idea that there are material energy resources going unexploited in Mexico because of a lack of capital is quite silly.

Second, since when did it prove anything that in order to be doing something properly, you have to be a net exporter? Once more, as with so many other Globollocks arguments, you see a mercantilist fallacy which is recognised as such if anyone tries to apply it to developed countries, but which is brought back in through the back door as a stick to beat developing countries with for being insufficiently neoliberal. So the fact that Pemex decides to pump its oil and leave its gas in the ground cannot possibly be evidence of anything other than a lack of foreign equity investment (foreign debt investment in the Mexican natural resources sector is huge).

It’s a nasty, patronising argument. And it’s based on a factual inaccuracy. And it has the effect of helping to create the idea in public debate that there is a crisis in Mexican energy policy which can only be solved by selling off their natural resource birthright. All of which makes me think that “Airmiles” Friedman might be something a little bit nastier than the harmless buffoon I had taken him for. Perhaps my words to him when I next see him in a lounge will have to be a little harsher than I had previously planned …

Footnotes:
1 No, Thomas “Airmiles”2 Friedman he now inescapably is, in my mind. Kristol will have to make do with the nickname “Slightly Fewer Airmiles”, or SFA for short.
2 Crooked Timber is now sixth result in a Google search for “Airmiles”

April 01, 2004

AirMILES!!!!

Posted by Daniel

Oh bloody hell he’s annoying me now. In the course of an insanely annoying piece of Globollocks (summary: Mexico went through hell to get ready for NAFTA and ended up hardly benefiting, so now what it needs is more neo-liberalism and what a shame it is that they aren’t able to impose it from above like the Chinese!), Thomas “Airmiles” Friedman1 manages to come up with this gem.

“While China and India each send tens of thousands of students to be educated abroad every year in science and engineering, particularly in the U.S., Mexico sends just 10,000”

Could anyone tell me why this might be the case? Anyone? Bueller?

Population estimated as of June 2003, from the CIA Factbook:

Mexico: 104,907,991
China: 1,286,875,468
India: 1,049,700,118

In other words, taking Friedman’s assertions at face value and assuming that “tens of thousands” means “less than one hundred thousand”, it looks like Mexico sends a higher proportion of its population overseas to study than China or India. Quite why this might be considered an interesting statistic escapes me, by the way, apparently it’s also possible to learn engineering in Mexico these days. But in any case, what the hell does he think he’s playing at trying to argue on the basis of raw numbers for massively different population sizes, and why does the New York Times let him get away with it? Someone needs his lounge access gold card shreddded.
1 Yes yes I know, the nickname “Airmiles” was originally coined for Kristof rather than Friedman2. But they’re more or less interchangeable anyway.
2Friedman was scheduled for the name “Even More Airmiles”.

February 18, 2004

Outsourcing; welcome to the world

Posted by Maria

These days, US fears of offshore outsourcing are echoed by European worries about an influx of poor Eastern Europeans when the accession countries join on 1st May. White House economists are pilloried for publicly stating The Bleedin Obvious, and the Daily Mail is convinced Britain will be overrun by Roma. What links these two issues? Fear of competition. Or, as our friends in literary theory might have it, dread of The Other. Suddenly, after 50 odd years of dispensing aid and the omni-prescription of market-opening commitments, liberalisation, harmonisation, free flow of capital, government investment in education and training and all the rest of it, the worst has happened. It worked. (Albeit at great cost, in a limited way, and for the chosen few.)

But instead of gratitude and docility from semi-developed countries like Thailand, India, and the Ukraine, the payback is more competition. They take our jobs whether they emigrate or stay at home. Apocalyptic flows of people and jobs are predicted, all in the ‘wrong’ direction. The cry goes up; ‘something must be done.’ But the real displacement going on is not of people, but of issues.

The US has begun its election year with the traditional lurch towards protectionism. And outsourcing is a very convenient bogeyman for an incumbent presiding over a jobless recovery – ‘it’s not that we didn’t create enough jobs, we’re losing them overseas’. But the Democrats are taking the bait, accusing Greg Mankiw of heartlessness and rubbing their hands in glee. The debate in the US, insofar as there is one (Republicans; ‘outsourcing is bad.’ Democrats; ‘no, it’s really, really bad.’) has taken quite some time to move up a gear and start talking about some of the benefits of outsourcing to the US economy.

Meanwhile, the rest of the world looks on with a bemused grin. ‘Multinational corporations are faithless and fickle and will move on to the next source of low-cost labour as quick as you can say ‘globalisation’.’ No shit. Other countries have lived for years with the risk that that the big IT firm they attracted to their spanking new industrial park (having won a bidding war against Glasgow, Lodz and Bratislava) will up sticks before even paying their negotiated rate of lower corporation tax. Entire national economies are structured according to the roll of the dice, or the simple luck to be in the right place at the right time and have a relatively cheap, eager, English-speaking workforce. But every European finance minister is looking over her shoulder for the next upstart country with a pocket full of structural funds and a crazy dream to be the next tiger economy. That’s just life.

But the benefits of outsourcing to the US economy are not the big issue here (bearing in mind that ‘here’ isn’t in the US). I wonder; what did we all think was going to happen with those aid programmes and World Bank mantras? Did we forget that the ‘developing’ in developing countries is a verb, not just a description, and that one day it might actually happen? Did we really think they’d play nice and be content to be merely another export market for the West? Wasn’t it clear that forcing open others’ markets for FDI in manufacturing and services while keeping our own markets closed in agriculture would make it rational to develop the former? And wasn’t it inevitable that forward-looking people in those countries would think to leap frog up the value chain with their technology parks and their Information Super Corridors? Because all that guff about bridging the digital divide isn’t just guff in developing countries. It is gospel. And, in small but important ways, it is starting to work.

Just as we seemed to lose sight of what it means to preach the benefits of information and communication technologies for economic growth and development, I think we’re also forgetting what is so good about outsourcing in developing countries. It is creating and supporting a middle class in countries with young or fragile democracies, or no democracy at all. Outsourcing is the market-friendly face of ‘soft power’, of making friends around the world by giving people just as big a stake in peace as the most lucky and affluent. If political arguments in the US are to trump economic reasoning that increased trade is not a zero sum game, then we need to look further afield at the political consequences of this phenomenon.

Doha showed us a lot of things, but the key lesson was that trade liberalisation in non-Western and developing countries cuts both ways. The Thailands, Brazils, and Indias are not pawns to be pushed around the board, nor are they grateful supplicantsm but real, live, self-interested actors making their own choices and finding their own way.

February 10, 2004

Americans in Europe

Posted by Chris

In partial reply to Brian Leiter’s (statisticallly supported) claim that people are better off living in social democratic nations (Western Europe, Canada …) than in the United States, David Bernstein of the Volokh Conspiracy writes :

I don’t recall any American I’ve met in my entire life permanently settling in Europe….

Well those I know aren’t dead yet — so it may depend on what you mean by “permanently” — but it wasn’t hard for me to get into double figures from people I know reasonably well here in the UK, some of whom have been resident for over thirty years.

February 08, 2004

Tragedy at Morecambe

Posted by Chris

The deaths of nineteen Chinese illegal workers who were cockling on the treacherous sands of Morecambe bay has generated much comment in the British press. Much of that comment has focused on their illegality, the exploitation of such workers by gangmasters, the need or otherwise for tighter immigration controls, globalization and so on. Indeed. There was a similar burst of indignation when some immigrant workers were hit by a train back in July . But one thing that needs saying is that such tragedies are a normal and predictable consequence of capitalism and not simply the result of coercion and abuse by a few criminals. In his Development as Freedom , Amartya Sen discusses two examples where workers, in order to assure basic capablities (such as nutrition and housing) for themselves and their families, have to expose themselves to the risk of injury or death. Jo Wolff and Avner de-Shalit have a paper on this theme (Word format) that is on the programme of the UCL’s School for Policy Studies for this Wednesday, they recount Sen’s examples:

The first is from the southern edge of Bangladesh and of West Bengal in India, where the Sundarban [forest] grows. This is the habitat of the Royal Bengal tiger, which is protected by a hunting ban. The area is also famous for the honey it produces in natural beehives. The people who live in the area are extremely poor. They go into the forests to collect the honey, for which they can get a relatively high price in the city. However, this is a very dangerous job. Every year some fifty or more of them are killed by tigers. The second case is of Mr. Kader Mia, a Muslim daily labourer who worked in a Hindu neighbourhood in Dhaka, where Sen grew up as a child. Mr. Mia was knifed on the street by Hindu people, and later died. While he was deeply aware and concerned about the risk of going to look for a job in a Hindu neighbourhood in troubled times, Mr. Mia had no other choice but to do so because his family had nothing to eat.

Those are third-world examples. But it is not be hard to add to the list of disadvantaged workers who take dangerous jobs to secure the means of life for their families. Whilst some of them involve illegal workers at the margins of society, not all of them do or have done. Mine workers get trapped underground even in advanced capitalist countries and many workers in the oil and chemical industries run a greatly increased risk of death or injury. And many people who have worked with asbestos now face a slow, lingering death.

All of these “normal” examples should give us some perpective on the image of the heroic risk-taking entrepreneur, who typically risks a great deal less than any of these workers do. Those who consider Marx outmoded and are amazed that anyone should take him seriously (scroll to comments) would also find that Capital volume one attends rather more closely to this enduring feature of capitalism than do more conventional accounts.

Trade unions, the Health and Safety Executive and other bodies such as local authorities and the police certainly need to do more to protect people as vulnerable as the Chinese cocklers who died at Morecambe. But we mustn’t forget that the root cause of many such tragedies is that poor people need to risk themselves in order that they and those they love may live. Unless they cease to be poor, and cease to face such unpalatable choices, such events will happen again and again.

UPDATE: See Felicity Lawrence in the Guardian .

January 26, 2004

Globollocks quiz!

Posted by Daniel

From Thomas “Even More Airmiles” Friedman’s column today:

“Former Mexican President Ernesto Zedillo remarked to me: “I don’t think I would have been successful in political reform without the decent economic growth we had [spurred by Nafta] from 1996 to 2000. Those five years, we had average growth of 5 percent.”

Who can tell me what might be considered by harsh judges to be perhaps a leetle bit misleading about this quotation?

Answer below the fold.

NAFTA wasn’t passed in 1996. It came into effect on January 1, 1994 (Zedillo was elected in August of that year). Not only that, but Mexican GDP fell by 6.3% in 1995 as a result of the currency collapse (a currency collapse that had as one of its main causes the massive inflows of loose capital which went into Mexico post-NAFTA). The economy didn’t recover it’s 1994 level of GDP until 1997. The growth in GDP between 1996 and 2000 was therefore at least partly a result of returning to trend after a shock. If you take the average 1994-2000, then you get an average growth rate of 3.4%. By the way, the real compound average growth rate of the Mexican economy, 1996-2000 is 4.3%, not 5% - I think Friedman or Zedillo is using an arithmetic mean of annual growth rates, a method of averaging which is not only clearly wrong, but exacerbates the problem of choice of base year.

None of which speaks to the question of whether NAFTA was a good thing or not, but it’s just another example of what I don’t like about Friedman.

January 16, 2004

Globollocks, v2.0

Posted by Daniel

Thanks very much to Michael Pollak, whose comments on the last Globollocks piece spurred me to make a few changes to this rather tiresome feature. Below, I score this piece by Nicholas “Airmiles” Kristof in the New York Times. The new scoring system is fairly self-explanatory; it’s based on the original Globollocks list, but it’s a bit more subjective rather than box-ticking, and you can now win points back for writing things that aren’t Globollocks.

Things that are Globollocks

“Sweatshop” as a category This may be a result of the short Op-Ed length, but Kristof says a number of things which seem outright weird. Is he trying to imply that construction workers want to get jobs doing stitching on shoes? What kind of toxic sweaters-o-doom might a garment factory be making that generate tons of effluent to dump into rivers? Or is Airmiles trying to suggest to us that “sweatshops” form a homogeneous class of capital assets? This matters, because labour standards are radically different in many industries, and the garment industry has a well-deserved reputation for being one of the worst. It also obviously matters because it makes a difference to the gender profile of industrialisation.
Points: 1 (it’s annoying rather than pernicious, and editing may be to blame)

The Smokey Mountain Myth This whole article is another version of a particular line of Globollocks argument that I trace back to this Krugman article. It’s basically an argument based on the implied assertion that there are no causes of unemployment in Third World countries other than protectionism. It’s not particularly coherent, to be honest, or even internally consistent. People scavenge on dumps because they have nothing better to do. This is because they are unemployed. However (as neoliberals are often keen to remind us when the context is the First World), trade policy does not actually have that much impact on the overall level of employment in a society; it can affect the level of income, but that’s not the same thing. It is not the case that Cambodia would achieve full employment overnight if its trade and labour policies changed to whatever prescription Airmiles is writing, so the fact that there are people scavenging on a dump in Phnom Penh is not actually something which can really be laid at the door of domestic protectionists. The idea that “jobs would be shifted” if this or that happened is a pure example of the lump-of-labour fallacy; Kristof would not say that “jobs were shifted” to Cambodia as a result of liberalisation and therefore shouldn’t make the symmetric claim.
Points: 5 (this is both an example of the “you just want to keep poor countries poor”, and an utterly spurious piece of economics)

Sweatshops that don’t sweat Kristof appears to make the assertion that it is possible to work in a shed full of sewing machines in a Southeast Asian country without perspiring. This is, to be honest, just bizarre. The problem here appears to be that his main quoted source for what conditions are like in factories is people who don’t work in them. He could, if he’d wanted to (and, IIRC, did, on his visit to Vietnam) compound the error by visiting the local Nike factory and taking it to be representative of the industry. Garment factories subcontracting for Nike, as a result of the highly successful company-specific campaign run against Nike in the 1990s, are in general very good at providing breaks, air-conditioning and a harassment-free environment for their workers. However, these improvements have not diffused to the rest of the industry at all, which is why the antiglobo lot place much less emphasis on company-specific campaigns these days.
Points: 3 (quite pernicious and quite misleading; Airmiles doesn’t appear to have done anything like the research needed to make such sweeping statements about labour conditions).

Is it great or not? The most annoying thing in this piece is that the actual economy of Cambodia doesn’t have a role in Kristof’s argument, other than as a provider of scenery. If Krugman were writing this article (or rather, when Krugman was writing almost exactly this article five years ago, linked above), he’d have made the argument that actually appears to be made here; that Cambodia’s labour standards and fair trade system cause unemployment to be higher, so they are responsible for people scavenging on dumps, so they are Bad Things. This argument is spurious, as argued above, but it’s at least an argument. Kristof, on the other hand, says “Cambodia has a fair trade system and promotes itself as an enlightened garment producer. That’s great.”, seemingly without realising that this has reversed the entire position he appeared to be arguing for. If Cambodia’s labour standards already meet the proposed minimum standards for trade, then you can’t use Cambodia as an example for why those minimum standards are a bad idea, unless you’re prepared to also criticise the Cambodians. At its root is one of the fundamental theorems of Globollocs; that the points of the antiglobo lobby are purely the opinions of the First World’s middle class. The reason why Airmiles gets into this logical convolution is that he wants to paint the issue as a black-and-white one of do-gooding Westerners attempting to impose their own standards (like the standard that it’s incredibly bad to have to scavenge rubbish?) on Third World countries where those standards aren’t appropriate. In conceding that the Cambodians at least, want exactly the protections that Gephardt wants for them, Kristof is giving away a lot of the rhetorical force of his argument
Points: 2, and I think I’m being lenient

“For the fundamental problem in the poor countries of Africa and Asia is not that sweatshops exploit too many workers; it’s that they don’t exploit enough” This ludicrous false dichotomy was presumably meant as a sonorous-sounding cliche rather than a serious piece of analysis, and will be scored as such
Points: 1

Things that aren’t Globollocks

Minimum labour standards are basically back-door tariffs: Of course they are, and it’s rather shameful for First World unions to support them, and Kristof is right to point this out.
Points: Positive 4.

Overall assessment: Net of the four points won back, Kristof scores eight Globollocks points for this one. I think that’s about right. The central argument (that minimum labour standards are disguised tariffs and bad for the Third World) is a decent one to make; I personally don’t think the case is conclusive, but it’s not actively bad. But the “product liability” aspect of Globollocks is important here I hold Kristol responsible not just for his central thesis, but for the cumulative effect on the debate of all the argumentation he uses in support of it. And this cumulative effect is quite bad. It’s not fair to portray all opponents of neoliberalism as not caring about the Third World; neither is it fair to portray them all as being ignorant either of conditions in Third World economies of of economic theory. And the Smokey Mountain Myth is one that really needs to be laid to rest. So, Kristof sets the benchmark for the new system (points probably not commensurable with the old one); 8 points is what you get for writing a pretty crapulous but basically well-intentioned piece of Globollocks. The nickname “Airmiles” has been awarded to him by me for cumulative lifetime achievement rather than for this specific piece, btw.

December 31, 2003

Globollocks, again

Posted by Daniel

One more in our occasional ill-tempered and extremely unfair series keeping track of breathless and/or mendacious “Globalisation” commentary from neoliberal commentators. This time, we take a look at an interview in Reason magazine with Johan Norberg, a Scandinavian who “used to be part of the left but then saw the light and is now back with a book explaining it all” (where have we heard that before). I realise that some will call “no fair” on using a Reason interview, because it’s a bit of a libertarian house mag, but Norberg is unlikely to confine himself to the specialist media going forward, and I thought I’d get my retaliation in first. Besides, as a piece of Globollocks, this one is off the scale.

Scoring

(for detail on scoring, see here

HEALTH WARNING: The “Globollocks” scale is meant to rate pieces of journalism, not whole ouvres and certainly not people. This is an important qualification as Globollocks pieces are usually produced by people who actually understand the issues quite well and often by people who have written other works on the subject which are not Globollocks. It is particularly important to observe the distinction in this case, as this is an interview with Reason magazine, and it is thus wholly unfair to pin the whole Globollocks score on Norberg; a lot of the Globollocks in this interview appears to me to be responses to leading questions. But anyway, on with the show ….

Misleading characterisation of economies as “Globalisers”

Two points straight out of the box for saying that “Take just about any statistic, any indicator of living standards in the world, and you can see the progress that has been made over the exact period that worries globalization critics. In the last 30 years we’ve seen chronic hunger and the extent of child labor being halved. In the last 40 years, we’ve seen life expectancy going up to 64 years in developing countries […]”. This is exactly the sort of thing that my category “Reproduces ‘falling inequality’ results from Sala-i-Martin or similar without emphasising dependence on China and India” was meant to pick up.

I’ve worried about whether “Mentions Korea or Malaysia without qualification” was really such an awful sin as to merit 3 points, but as you’ll see below, there are enough unpunished offences in this piece that I’m happy to let it stand. After all, they got Al Capone for tax evasion, and his discussion of the Vietnamese doi moi program is misleading enough to justify this score on its own ….

We also have a case of “Identifies (Botswana) Hong Kong, Singapore as a development model”. Some commenters in the original Globollocks thread disagreed with me over specific questions of the economic history of Singapore, but I remain of the opinion that 1) you can’t argue from small dense populations to large diffuse populations and 2) the investment capital put into Singapore by the British was material to its development and it is not realistic for any other economy to expect this level of foreign investment. So two points here.

7 points

Equivocation between capital and goods market openness

I see here that the Globollocks scorecard unfairly discriminates against articles which engage with the technical issues. Norberg appears to be full of it on this one, but doesn’t make any really specific claims.

“General failure to distinguish between capital and goods openness” only gets you one Globollocks point, but “particularly egregious examples” has a tariff of up to 3 points, and I think the full 3 are appropriate here. Norberg has written a book about free trade and called it “In Defence of Global Capitalism”. The equivocation is right there in the title, and is ruthlessly exploited throughout the interview. Maybe this is the fault of the Reason interviewer (my past experience in this matters is the Ronald Coase/lighthouses affair, which certainly involved someone making claims in a Reason interview that he didn’t care to defend elsewhere), but I didn’t give Doug Henwood the benefit of the doubt, so I’m damned if Norberg’s gonna get it.

3 points

Conflation of WTO agenda with “openness”

I’m gonna give 1 point here for the sliding scale of “In general, argues back and forth between general statements about trade and specific statements about currently live negotiations” for the discussion of genetically modified food. This is probably a bit harsh, as Norberg does actually argue lower down for unilateral free trade.

1 point

World Bank and IMF apologia

None.

Europhobia and miscellaneous

I didn’t think I’d ever catch anyone with “Specifically in the case of Vietnam, says or implies that children working in Nike factories would not alternatively have been going to school”, but five points it is. Norberg apparently carried out some interview in Vietnam, but he’s equivocating madly between the adult workers in the Nike plants (young women whose alternative employment is probably agriculture) and the school-age workers (who would otherwise be in a government-run school).

There are also a few passages on “economic liberalism” which look like they “talk about privatisation of domestic industries as if it was relevant to ‘globalisation’”, but since the context is global capitalism rather than globalisation per se, I’m gonna let it ride.

5 points

Cliche points

One single paragraph just racks up the points here like a stuck pinball. Within a few sentences, Norberg “Says or implies that there is no anti-globalisation movement in developing countries” (2 points), “Says or implies that developed world antiglobalisation movement is opposed to trade (1 point) and “wants poor countries to stay poor” (1 point)” I’m also going to make an ad hoc award of two cliche points for what JohN Quiggin has correctly identifed as a “Sunday School conversion story”.

Final score

This piece manages to rack up a staggering 16 Globollocks points and 6 cliche points!!!! I draw readers’ attention to the disclaimer at the top of the piece, however.

October 16, 2003

Globollocks Watch

Posted by Daniel

Starting a new occasional series, I’ll be keeping a look out for particularly egregious examples of breathless and/or mendacious “Globalisation” pieces from neo-liberal commentators. This isn’t to say that the antiglobo side doesn’t also talk a load of bollocks; it often does. But there’s already a cottage industry going keeping tabs on them, and immanent criticism of the neoliberal agenda is more up my alley.

I’ll be scoring things which catch my attention using the following scorecard (note; this is a first draft and suggestions would be welcome).

Misleading characterisation of economies as “Globalisers”

Mentions India as “globaliser” without qualification — 1 point
Mentions China as “globaliser” without qualification — 3 points
Mentions Korea or Malaysia without qualification — 3 points
Reproduces “falling inequality” results from Sala-i-Martin or similar without emphasising dependence on China and India - 2 points
Refers to Botswana, Singapore or Hong Kong as if they provided development models — 2 points
Mentions Heritage Foundation or Cato Institute Economic Freedom indices — 1 point, with possibility of 0 points in truly mitigating circumstances

Equivocation between capital and goods market openness

Refers to capital controls as “protectionism” — 3 points
Refers to “capital flows to developing countries” in abstract without reference to actual net capital flows — 1 point
General failure to distinguish between capital and goods openness - 1 points
Particularly egregious or mendacious examples of above — 2 points, 3 in extreme cases
Ludicrously overstated estimates of the benefits of capital market openness - 2 points

Conflation of WTO agenda with “openness”

Uses % of trade in GDP as measure of “globalisation” when context is specific advocacy of WTO agenda items - 2 points
Talks about TRIPS agreement as if it increased economic freedom - 3 points
In general, argues back and forth between general statements about trade and specific statements about currently live negotiations - 1-4 points on a sliding scale

IMF/ World Bank apologia

Claims that IMF does not interfere with national sovereignty - 2 points
Blames failure of IMF programmes on “corruption”, “failure to liberalise” or any other factors which did not change during the program — 2 points
Pretends that World Bank is not responsible for projects financed with World Bank loans - 1 point
Refers to “moral hazard” as if it was a problem for developing countries - 2 points (any article which contains the phrase “bail-outs” will be prima facie assumed guilty on this count)
Talks about “market access” of countries with no non-official creditors in discussions of debt relief - 4 points
Pretends that IMF programmes did not make things worse in cases when they did - 2 points
Pretends that IMF did not “endorse” economic policies which were contained in programmes which they signed off on - 1 point

Europhobia and miscellaneous

Claims or implies that the European Union is anti-globalisation — 1 point
Blames the French without making specific allegations - 2 points
Mentions farm subsidies in an article without mentioning textile subsidies - 1 point
Talks about “devastating impact” of cheap food imports on domestic agricultural sector in article which also refers to positive impact of cheap manufactured imports - 2 points
Specifically in the case of Vietnam, says or implies that children working in Nike factories would not alternatively have been going to school — 5 points
Refers to “corruption” in countries without meaningful corruption problems — 4 points
Refers to Phillippines post-1998 without mentioning Indonesia - 1 point
Talks about privatisation of domestic industries as if it was relevant to “globalisation” - 2 points

Cliche

Refers to “basic economic theory” - 1 point
Refers to “Economics 101” - 1 point (American commentators) or 3 points (European or UK commentators for whom the reference is meaningless as well as cliched)
Says or implies that there is no anti-globalisation movement in developing countries - 2 points
Says or implies that developed world antiglobalisation movement is entirely middle class - 1 point
Says or implies that developed world antiglobalisation movement “has no idea of what it is in favour of”, “is opposed to trade” or “wants poor countries to stay poor” — 1 point each
Says or implies that protests at IMF, WTO or World Bank summits are “irrelevant” - 1 point
Refers to “rigour” of not particularly rigorous arguments (What kind of rigour do neoclassical economists have? Analytical rigour) - 1 point.
Refers to collapses of negotiations as “a tragedy for the Third World” - 2 points, plus 1 point if said “tragedy” is blamed on someone whose fault it wasn’t
References to Swiss bank accounts, Mercedes, etc - sliding scale of 0-3 points depending on offensiveness and/or accuracy of charge

I’ll be keeping two scores - a general “Globollocks” score and a separate “Cliche” score, because I suspect that unless kept under tight control the Cliche category will end up dominating the whole thing. By way of example, I award this Oliver Kamm post 10 points for Globollocks (4 for unqualified mentions of China and India, 4 for capital/goods equivocation and 2 for use of “exposure to global economy” as a proxy for “globalisation”) and 3 cliche points (“analytical rigour”, “wants poor countries to stay poor” and “basic economic theory”). I’ve no idea whether that’s a low or a high score until I start scoring a few more. If you see an example that looks like it might be worth scoring, give me a shout.

[EDIT]: Just for clarity, I’m scoring individual pieces, not entire ouevres and certainly not people. Oliver Kamm in general writes a lot of stuff on globalisation and by no means all of it is Globollocks. In general, in fact, most Globollocks is written by people who actually do understand the issues they’re talking about, but oversimplify them. I think that Globollocks has its roots in the way in which various flavours of antiglobo abused Paul Krugman’s work on strategic trade. Anyone at the time who saw how badly and egregiously this was used in the service of out-and-out protectionism could possibly be forgiven for deciding to never again make anything that might possibly be seen as a concession.