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John Quiggin

I’ve been working for some time on a review of the first full-length text based on Modern Monetary Policy, Macroeconomics by William Mitchell, Randall Wray and Martin Watts. A near-final draft is over the fold

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Whataboutery and the pandemic

by John Quiggin on May 15, 2020

Among the many consequences of the Covid-19 pandemic, and the measures taken to control it, there has been an epidemic of whataboutery. The starting point is the claim “we have locked down the entire economy to reduce the number of deaths from Covid-19, but we tolerate comparably large numbers of deaths from X”. Popular candidates for X include smoking, road crashes and influenza. In most, though not all, cases, the inference is that we should accept more deaths from the pandemic. Indeed, the majority of those using this argument are also opposed to any proposal to do more about the various examples of X they cite

I’m going to take the contrapositive, and argue that the inconsistency pointed out here should be resolved by taking stronger action to reduce avoidable deaths from a wide range of causes, with the primary examples being road deaths and smoking.

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May Day

by John Quiggin on May 4, 2020

It’s the May Day public holiday here in Queensland, transformed, like every other public event, by the coronavirus pandemic

Most obviously, there is no May Day march for the first time in many years (possibly since the first march in the 1890s, I haven’t been able to find out for share).

More significantly, ideas associated with May Day that seemed to belong to a distant past have suddenly become crucially relevant. The most important of these is the injustice, inefficiency and absurdity of a society where those who do the most vital work are underpaid and disregarded, while the biggest rewards go to a class that turns out to be of no use when it really matters.

There is already pressure to ‘snap back’ to what was seen as normal in the recent past as soon as, or even before, the pandemic is controlled. But the message of May Day is that a better society is possible, and that the achievements of the workers movement over the past century can and should be defended and extended.

Among the many changes we need is a push to reduce inequality through both predistribution (changing the way the market rewards work) and redistribution (taxation and transfer payments). In practice that means higher minimum wages, higher wages for those who provide us with the basic wages we all need, and better funding for public services of all kinds. For those at the top of the income distribution, incomes will have to decline, either through predistribution (lower market incomes) or redistribution. In the context of Australian universities, the closure of borders implies a big reduction in revenue from international students. In the short run, the cost of that is mostly being borne by contract employees who aren’t being renewed. But the burden should be shared more fairly, starting at the top (our vast array of vice-chancellors, deans and others)and extending to senior academics (including economics professors). In the longer term, we need a fundamental reform of the system, based on the goal of universal access to post-school education and training, but that’s a topic for another post.

Another open thread on the pandemic

by John Quiggin on April 29, 2020

Most of us are six weeks or so into some kind of lockdown by now, so it would be interesting to read some comments on our experiences. From the discussions I’ve had (almost entirely online rather than in person) my perception is that people with office jobs and no kids at home are finding it much easier than might have been expected, but that those with kids at home are finding it every bit as hard as you would think. So far, the impact on those who have lost jobs (or work like conference organization) has been cushioned by income support, in Australia at any rate. Less online discussion with those still working, of course.

Experiences and thoughts?

Vermeule

by John Quiggin on April 26, 2020

While trawling through my old posts, I came across this one, which looks at the case for the death penalty presented by Cass Sunstein and Adrian Vermeule. At the time, I was moderately familiar with Sunstein, but knew nothing at all about Vermeule, who has now emerged as an advocate of theocracy (called “integralism” in its Catholic version). I thought about a three-degrees separation, running off the fact that, while I am no fan of Sunstein, quite a few people I respect and work with like (and, I think, work with) him. Before I wrote it though, I searched CT for references to Vermeule, and found him contributing to a 2013 book event we held, on Johnson and Knight’s The Priority of Democracy. What he writes there seems sensible enough to me, pointing out potential problems for democracy but not implying anything like his current position

It appears that Vermeule converted to Catholicism recently, so maybe this was part of some intellectual crisis, or maybe he was just swept up in the Trumpist wave. Any thoughts?

Noises off

by John Quiggin on April 22, 2020

A couple of weeks ago, I recorded a video presentation about the likely employment effects in Australia, as part of my university’s response to the pandemic. The sound quality wasn’t great, what with reliance on my computer microphone, a spotty Internet connection and my accent, which is too strong even for some Aussies.

The communications people at the Uni got back to me and said it might have to have subtitles, but they could improve things by lowering the volume of the background music. My immediate reaction was unprintable, and while I managed to calm down, I wrote back to say that under no circumstances would I accept any kind of musical accompaniment. They cut out the music and managed to get it done with closed captions (the kind that are turned off my default).

But, obviously, I’m in an aging and shrinking minority here. David Attenborough’s documentaries, which I used to love, are now unwatchable (or rather unlistenable), with lush orchestral music crashing over his narration. If it’s not that, it’s an annoying metronomic repetition of the same five notes over and over. When people complain, the answer is “this isn’t a lecture”. But that’s exactly what I want from a documentary – a lecture with high-quality video combining to convey more information than either alone. Music, by contrast, conveys no information at all (except, I guess, “this is bad music”). If I wanted a content-free audiovisual experience, I’d far prefer a live band at the pub, with smoke and strobe lights, to someone’s musical interpretation of animal behavior overlaid on some barely audible talk.

Thinking about this brings up the more general issue of background music in films. It’s such an established convention you barely notice it most of the time. But I’ve quite often had the experience of hearing vaguely dissonant music as a character enters a room, and not knowing if this is part of the film, supposed to be audible to the character, or just part of the soundtrack. It’s just as artificial in its way as the characters in a musical bursting into song at the drop of a hat, and yet it’s a standard part of what is supposed to be realistic drama.

That’s it from my Grumpy Old Guy persona. Does anyone share my grumpiness, or want to persuade me out of it.

Borders

by John Quiggin on March 23, 2020

As part of the general lockdown in response to the pandemic, most of the Australian states* have just closed their borders (as has the US state of Hawaii I believe). For those antiglobalists who have been claiming that the pandemic justifies their opposition to “open borders”, this presents a problem. Unlike international borders, those within countries like Australia have truly been open, with the exception of a handful of quarantine restrictions. Once the pandemic passes, does the anti-migration lobby want to introduce internal passports, require everyone to justify their movements to the police and so on? That would seem to follow from the logic of many of their arguments, not just about the pandemic but about overpopulation, competition for jobs and so on.

As regards the pandemic, it has raised the point that on any given day, millions of people are (or were, until recently) crossing international boundaries. The proportion whe are doing so for the purpose of migrating from one country (legally or otherwise) to another is minuscule. For example, Australia (poulation 25 million) is a high migration country, with 162 000 migrants in 2019. In the same year, there were 42 million passenger arrivals. If we assume that half are returning Australians and that visitors stay an average of two weeks, that implies there are over a million non-migrant foreigners in the country at any given time, equivalent to five or six years worth of migration. Are the restrictionists calling for them to be excluded permanently?

A final observation is that our quasi-military Border Force, created to stop refugees arriving by boat, has done a pathetic job in dealing with cruise ships loaded with infected and potentially affected passengers. Thousands have been allowed to disembark and return home without even a temperature check, then frantically chased when tests on fellow-passengers came back positive.

Crises and the case for socialism

by John Quiggin on March 21, 2020

The coronavirus crisis is very different, at least in its origins, from the Global Financial Crisis. Both differ in crucial respects from other crises in living memory, notably including the Great Depression and World War II, as well a string of severe but not catastrophic crises that have affected the global economy and society. But thinking about them all together brings home the point that major crises are quite common events. The crisis of the past took each took between five and ten years to resolve. Even if the current crisis is shorter, we can draw the conclusion that crisis of one kind or another is not an aberration, but a regular occurrence in a complex modern society.

What they have in common is that they result in a need for urgent government action. The greater the capacity and willingness of governments to act to protect society from the economic damage associated with such crises the better, in general, the outcome has been.

The most immediate requirements for dealing with a crisis are * a strong and comprehensive welfare state, protecting everyone against falling into poverty through sickness, old age and unemployment * strong protections for workers, protecting them against arbitrary dismissal, and with a public commitment to restore and maintain full employment These will have to be made up as we go along, plastered over the existing patchwork, then properly integrated into the welfare and industrial relations system In the aftermath, we need a substantially expanded economic role for government, including control over infrastructure and financial enterprises and increased public provision of health, education and other services. All of this will require a substantial increase in the public share of national income, which can only be financed by reducing the share going to high income earners, and particularly the top 1 per cent. In short, we need socialism.

How to get to a UBI

by John Quiggin on March 20, 2020

Last year I published a book chapter arguing that the first step way to get to a Universal Basic Income in Australia was to expand the existing benefit system, increasing payments and removing conditionality (relevant extract over the fold).

This is often called a Guaranteed Minimum Income (GMI). I counterposed the GMI approach to the alternative of making a small payment to everyone in the community, and then trying to increase it over time. I suggested three initial steps

Assuming a ‘basic first’ approach is preferred, how might it be implemented? Three initial measures might be considered:

(i) increase unemployment benefits, at least to the poverty line;

(ii) replace the job search test for unemployment benefits with a ‘participation’ test;

(iii) fully integrate the tax and welfare systems

We are already on the way to taking these steps. Having floated the idea of a separate benefit for people who lose their jobs due to the virus crisis, the Australian government has quickly abandoned it in favour of an increase in existing benefits. This is supposed to be temporary, and, in theory, at least, there has been no change in compliance efforts like work testing. But ‘temporary’ will turn out to be a long time, and compliance efforts are going to be impossible until things return to normal.

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Zoom

by John Quiggin on March 17, 2020

I just gave my first UQ departmental seminar using Zoom. As in most places, our usual practice is to have visiting speakers present their work and meet colleagues in the same field. When large numbers of Chinese students were prevented from returning to Australia in the first round of the coronavirus epidemic, the cost to the university’s budget was such that nearly all travel, including paying for visitors’ travel was cancelled. As it’s turned out, a good thing to. This left big gaps in the seminar program, so I volunteered to present a paper in one of the vacant slots.

By the time the seminar was scheduled to happen, budget cuts were the least of our worries. Lectures were stopped for a week while we switch to all-online teaching, and (nearly all) meetings were cancelled. So, I decided to present the talk from home using Zoom. It went quite well, even though my home Internet is a bit flaky (the much-delayed National Broadband Network is supposed to arrive here next month, and may improve things). In the subsequent discussion, it was pointed out that we could invite people from outside the department to take part. For example, one of our PhD students had a paper accepted for a conference that’s been cancelled, and could ask some of the key people who would have been there to hear the presentation.

It also struck me that we could have gone back to the originally scheduled speaker, and had them do a Zoom presentation. That leads immediately to the question: why carry on with the tradition of flying colleagues in to have them talk to us, when they could just as well do it from home (or at least, from their home campus)? The difficulties are much less than those with online-only teaching.

Of course, I would say that. I’ve been pushing the merits of videoconferencing and related technologies for decades, and regularly respond to travel invitations by offering a video presentation rather than attendance in person. But now that lots of people are experiencing the process and finding it works reasonably well (and in fact has substantial advantages), returning to the old ways once the crisis is over may be too difficult to justify, especially since our budget is going to be stringently rationed for a long time to come.

Rightwing postmodernism

by John Quiggin on March 4, 2020

Next week in Brisbane, I’ll take part in a debate/dialogue with Stephen Hicks, a North American philosopher, who has criticised postmodernism from a right/libertarian perspective. He’s on a tour of Australia, and was invited to Brisbane by Murray Hancock who’s setting up The Brisbane Dialogue which has the ambitious objective of promoting civil discussion across political divides. I ended up being dobbed in (is this an Australianism?) to present the other side, and chose the topic “Postmodernism is a rightwing philosophy”. Longterm readers of my blogging won’t be surprised: I was making this claim as far back as 2003. Thanks to Kellyanne Conway and “alternative facts”, I’ll have plenty of material to work with.
I plan to argue that in the absence of any objective correspondence to reality, it’s the truths favored by the rich and powerful that will win out, not those of the oppressed. Trumpism is the obvious illustration of this, but rightwing postmodernism on issues like climate change and creationism long predates his rise.

Still, I have a couple of problems. First, I’m not a philosopher, so I’m working with a pretty simmple interpretation of postmodernism, roughly stated as “there are multiple truths, and no one is better than another” More precisely, as I encountered it, postmodernism involved a Two-Step of Terrific Triviality, putting forward statements that encouraged the simplistic interpretation most of the time, but, when challenged, retreating to into total obscurity, or else into something more nuanced and not very interesting like “there may be an actual truth of the matter, but we can never know it for sure” . But is there a better interpretation of postmodernism, one that is both interesting and comprehensible?

My second problem is whether constructive dialogue on a topic like this will prove to be possible. I think we’ll agree at least on not liking postmodernism, and probably on some of the intellectual history. I have no idea, though, what Hicks thinks about Trump and Trumpism, or for that matter about climate change and science in general. I’ll see how it plays out.

Planning for Pandemics (repost from 2005)

by John Quiggin on February 28, 2020

The news of deaths from bird flu in Indonesia is pretty scary. Although, as I’ve mentioned recently Indonesia has made a lot of progress in many respects, the handling of this threat so far seems to show the worst of both worlds: all the ill ffects of authoritian habits combined with the timidity of weak politicians. There have been a lot of coverups, and an unwillingness to tackle the necessary but unpopular task of slaughtering affected flocks of birds. Things seem to be improving now, but there’s a long way to go.

It seems very likely that, sooner or later, bird flu will make the jump that permits human-human transmission, and quite likely that a major flu pandemic will result. The world, including Australia, is very poorly prepared for this. One thing we could do to prepare is to adopt a national program encouraging annual flu vaccinations for everyone, instead of just for limited categories of vulnerable people.

The main benefit of this is not that the shots would provide immunity against a new and deadlier flu variant (though there might be some limited benefit of this kind) but that we would have the infrastructure, production facilities and so on to undertake a mass vaccination against such a variant if it arose. As it is, it seems likely that many countries will be scrambling to get access to an inadequate world supply of vaccines, but if Australia and other developed countries ramped up normal levels of production, it would be much easier to generate extra supplies for our neighbours.

I haven’t looked into it, but my guess is that, even without considering the possibility of a pandemic, the benefit-cost ratio from such a measure would be pretty high. Flu is very costly in economic terms, and I suspect that, if pain and suffering were thrown into the balance, a program of universal free vaccination would come out looking pretty good.

Notes  I wrote this in 2005 thinking about new flu strains. The only difference I see with “novel” viruses is that the time taken to produce the initial batches of a vaccine is likely to be longer. As is usual with my policy advocacy, little if anything has been done along the lines I suggested.

Vaporfly

by John Quiggin on February 23, 2020

Like most recreational tri-athletes, I don’t pay much attention to what’s happening in the top levels of the sport, let alone in the separate worlds of swimming, cycling and running[1]. But I took notice last year when Eliud Kipchoge ran a marathon distance in under two hours, a barrier long thought to be unbreakable, and one that reminded my of my failed attempts to break four hours over the same distance.

Kipchoge had plenty of help in his effort, including pace runners (providing an added drafting benefit) and a guide car projecting laser light on to the track to ensure exact pacing. These non-standard features mean that the time doesn’t count as a record for the marathon event.

Apparently, the biggest boost, however, came from his shoes, Nike’s recently released Vaporfly’s which incorporate a special carbon plate and a foam designed to return as much as possible of the energy expended from the impact of each pace. In subsequent events, runners with Vaporflys have produced winning times as much as 4 per cent faster than would be expected. And, it seems, the benefit is just as great, or even greater, for middle-aged slowpokes.

As with similar innovations in swimming and cycling, there was a lot of pressure to ban these technological marvels. But the International Olympic Committee, unwilling to take on the might of Nike, decided to allow the shoes, while trying to limit further innovations.

So, should I lay out $A300 or so for a pair of these marvels, which apparently may last for only a couple of hundred km (YMMV)? For the moment, I’m not going to. I’m going to have one more try to break four hours, and for this purpose I’m racing against my (not quite as old) self, not other competitors or even the clock. Once the technology becomes general, I’ll no doubt adopt it like everyone else.

In the meantime, what really appeals to me is the claimed capacity of cooling wristbands to lower body temperature. Even in moderate temperatures, I end events drenched in sweat and temperatures in Queensland aren’t always moderate. Does anyone have any experience/thoughts on this?

The worst case is happening

by John Quiggin on February 6, 2020

A couple of years ago, I published an article on why “extremely unlikely” climate events matter. The central point was that climate outcomes with a probability of 5 per cent or less (“extremely unlikely” in IPCC terminology) were still much more likely than risks we take seriously in our daily life, like dying in a car crash). As an illustration, at the time the piece was written, it seemed less than 5 per cent probable that, within two years, many countries in the world (including Australia) would see catastrophic fires on the scale of those that have actually happened.

I made this point in an interview for an ABC story on economists’ views of the likely costs of 3 to 4 degrees of climate change. Most of those interviewed agreed with me that the costs were likely to be much higher than suggested by economics Nobelist William Nordhaus (with whom John Horowitz and I had a debate in the American Economic Review quite a while ago). We pointed out, among other problems, that a paper he had co-authored implied an optimal July temperature of -146 degrees Fahrenheit.

Nordhaus declined an interview, but his viewpoint was represented by Richard Tol. Longstanding readers will remember Tol as a commenter here who eventually wore out his welcome.

The other point I made in the interview was that the abstruse debate about discount rates central to much of the debate between Nordhaus and Nicholas Stern has turned out to be largely irrelevant. The premise of that debate was that the costs of unmitigated climate change would be felt decades into the future while the costs of mitigation would be immediate.

As it’s turned out, the costs of climate change have arrived much sooner than we expected. And the only mitigation options adopted so far have been low cost or even negative cost choices like energy efficiency and abandoning coal (more than justified by the health costs of particulate pollution).

That doesn’t mean discount rates are completely irrelevant. If we manage to decarbonize the global economy by 2050, benefits will keep accruing well after that. But even if we stopped the analysis at 2050, we would still have a substantial net benefit. The likely cost of near-complete decarbonization now looks to be less than a two per cent reduction in national income. Reducing the frequency and severity of disasters like the bushfires will more than offset that.

Driving across the uncanny valley

by John Quiggin on February 5, 2020

In May last year, I posted a tally of successful and unsuccessful predictions, and was challenged in comments on my optimistic views about self-driving cars. I’ve said all I can about the fire apocalypse for now, so I thought I might check how things were going. That’s motivated largely by the belief that autonomous vehicles will almost certainly be electric, a view shared by GM CEO Mary Barro, according to this report.

The same report points to missed deadlines and delays, mostly caused by a small number of high-profile fatalities, all but one associated with Teslas on autopilot (Level 2 technology in the jargon)

That slowed things down enough to falsify my predictions. Neverthless, GM is now petitioning the National Highway Traffic Safety Administration to allow up to 2500 completely driverless (no steering wheel or pedals) on the roads. At the same time, Google subsidiary Waymo claims to have started commercial operations of fully driverless (they prefer the term “rider only”) taxi services in its test area in the suburbs of Phoenix.

These are both small scale programs. The significance lies in the fact that they cross the uncanny valley of almost driverless (Level 3) technology with a human safety driver. The high-profile fatal crash that slowed things down in 2018 was caused by a distracted safety driver, and there’s no obvious way to overcome the problem of distraction in a vehicle that almost always drives itself.

The Waymo and GM vehicles are Level 4, capable of operating without any human intervention, but only in limited conditions (flat, sunny, Arizona suburbs). But, if the jump to fully driverless operation succeeds, it’s a matter of incremental steps to larger operating areas, a wider range of weather conditions and so forth. Given that they are being held to much higher standards than human drivers (who killed over 36000 people in 2018 without attracting much attention) the developers of AVs will have to be ultracautious in relaxing their operating constraints. But crossing the uncanny valley is the crucial step. If they succeed in that, the rest is a matter of time.