John Q

Looking at the array of ignorant and vindictive old men attacking Greta Thunberg and other young climate activists, the case for lowering the voting age is just about unanswerable. Anything that could be urged in justification of stopping 16 year olds, as a group, from voting, is equally applicable to those over 60 (a group to which I belong). Over 60 voters are, on average, poorly educated (the school leaving age in Australia was 15 when they went through and I assume similar in most places), and more likely to hold a wide range of false beliefs (notably in relation to climate change).
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Among the few replicable findings from research on higher education, one of the most notable is that student evaluations of teaching are both useless as measures of the extent to which students have learned anything and systematically biased against women and people of color. As this story says, reliance on these measures could lead to lawsuits.

But why hasn’t this already happened. The facts have been known for years, and potential cases arise every time these evaluations are used in hiring or promotion: arguably every time the data is collected. And student evaluations are particularly popular in the US, where litigation is the national sport. Yet no lawsuits have yet taken place AFAICT.

Maybe the zeitgeist is changing. I was going to write this post before seeing the linked article, which turned up in my Google search. Any lawyers or potential litigants want to comment?

One of the vanished joys of academic life is the experience, after publishing an article, of getting a bundle of 25 or 50 reprints in the mail, to be distributed to friends and colleagues, or mailed out in response to requests from faraway places (if you live in Australia, everywhere is faraway), often coming on little postcards. Everything is much more efficient nowadays, and I just finished throwing away my remaining collection of reprints. But now, an electronic ghost of the reprint has come to visit.

Earlier this year, I contributed an article to a special issue of Globalizations on “The diffusion of public private partnerships: a world systems analysis”. This is a fair way outside my usual academic area of expertise, a fact which may be apparent to readers who know more about the topic than me, but I wanted to say something about Australia and New Zealand. I just got an email from the publisher offering 50 free e-prints . I don’t think my fellow economists will be much interested, and most would have library subscriptions anyway. So, I’m opening it up to my readers. As I understand it, the first 50 to download it get it for free. After that, anyone really interested can email me for a copy.

Update If you want a copy just click on the link

Back in 2004, I wrote that

There is only one real instance of political correctness in Australia today and that is that you are never, ever allowed to call anyone a racist. It’s OK to say that Adolf Hitler was a racist, and that apartheid was racist, but the idea that any actual Australian could be a racist is utterly taboo.

Of course, the same was true in the US. But after two and a half years of an openly racist Trump Presidency in the US, the taboo seems finally to be open to challenge. Opinion writers and individual Democratic politicians have been calling out Trump’s racism for some time, but news reports have stuck with lame euphemisms like “racially charged”, or saying that “critics have called it racist”

In the wake of the House resolution condemning Trump latest racist tweets, the ground may have shifted, at least a little. Quite a few news organizations have used the R-word, in their own voice, to describe Trump’s “go back to where you came from” tweets, and others have tiptoed towards the line.

Most notably. CNN and Washington Post political reports are now referring to Trump’s racist tweets in matter-of-fact terms, noting that Trump sees them as politically advantageous and discussing the implications for the 2020 campaign. (Hat tip: Daniel Quiggin). 

There’s still quite a few steps to go before the taboo is ended. Even moving from “Trump’s racist tweets” to “Trump’s racism” will take a fair bit of courage. And so far only CNN has used the word routinely. The NY Times hasn’t even got past “widely seen as racist.” . (For that matter, it’s still calling Trump’s lies “falsehoods” to avoid feeding ” the mistaken notion that we’re taking political sides.”

This isn’t just a matter of rhetoric. It’s difficult to do any kind of political analysis clearly if one of the main political tendencies can’t be named. Trump’s re-election hopes depend to a large extent on motivating racist Republicans to vote and on peeling off the remaining racists from the Democratic Party. Try to make this obvious point without using the R word and you end up with obfuscation or worse, such as the use of”working class” as code for racism.  

A lot of discussion of immigration is framed around the distinction between movers and stayers. Until recently, most of what I’ve seen has framed “stayers” as those who see their economic interests as being threatened by competition from immigrants. To protect themselves, they want to restrict immigration, even if the consequence is to restrict the opportunities for “movers” from their own country. The harm to these “movers-out” is just collateral damage

But lately I’ve been seeing a different account, in which it’s the departure of the movers-out that is causing problems by reducing the supply of workers to provide services to, and pay taxes to support, the stayers (particularly, the old). In economic terms, the obvious solution would be to replace the movers-out with movers-in, but they are of the wrong religion, skin colour and so on, and are therefore rejected. That exacerbates visible economic decline, particularly in terms of the level of economic activity, even when income per person holds up or is sustained by transfer payments. This in turn produces support for Trumpism and its variants.

This story comes up most clearly in relation to Eastern Europe (most notably Hungary) following accession to the EU, but I think it’s applicable to many rural areas in richer countries.
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Recent elections (notably including those for the European Parliament) have shown the evolution of what I’ve called a three-party system, replacing the alternation between soft and hard versions of neoliberalism dominant since the 1980s. The three parties in this analysis are the (a) remaining elements of the neoliberal consensus, (b) Trumpists[1], and (c) leftists, defined as broadly as possible to encompass greens, feminist, social democrats, old-style US liberals, as well as those who would consciously embrace the label “Left”.

When I wrote in 2016, the biggest loser from this process seemed to be the kind of soft neoliberalism exemplified by Blair, and many of the European social democratic parties. But that was before Trump and Brexit.

The striking development of the past few years has been the capitulation of the mainstream rightwing parties to various forms of Trumpism. That’s most obvious with the US Republicans. And, while some advocates of Brexit may still hope for a free-market utopia, its pretty clear now that this is unlikely to happen. The continuing desire to get Brexit done at all costs is all about culture wars, with Leavers cast as the British people and Remainers as out of touch elites. The same pattern is evident in Australia, where free market policies have been abandoned in favour of culture wars, to the extent that the government is seriously considering building coal-fired power stations, just to make a point.

I’m not well enough attuned to the nuances of European politics to discuss developments at the national level. In aggregate, though, it seems clear not only that the mainstream conservatives are losing ground electorally, but that they are moving towards Trumpism.

This suggests that the current three-party system might rapidly resolve itself into a new two-party system: Trumpists against everyone else, with the remnants of the old neoliberal duopoly being forced to take sides. This is already happening to some extent.

In this context, it was striking to read a piece in the Washington Post, of all places, slamming the “economically conservative, socially liberal” centrism of Howard Schultz, and pointing out that

Centrism,” in other words, has become a byword for the politics of the business elite. Defined left to right, on an x-axis, it may approximate the center of the political spectrum. But on a y-axis that represents socioeconomic status, it sits at the very top.

It’s hard to say where centrists will end up. On the one hand, they mostly benefit from the regressive tax policies and weak regulation that Trumpists have carried over from hard neoliberalism. On the other hand, the Trumpists have abandoned free markets for crony capitalism, typically favoring well-connected national insiders, exemplified by the US First Family. That poses problems for global corporations and fans of globalized capitalism like Tom Friedman, who still yearn for the halcyon days of the 1990s.

As ought to be obvious, I’m still working this out, so I’ll leave it to commenters from here.

fn1. I previously called this group “tribalists”, which was problematic. The Key characteristic is the identity politics of a formerly unchallenged dominant group facing the real or perceived prospect of becoming a politically weak minority, as with white Christians in the US. As Trump and others have shown, this kind of politics leads naturally to support for demagogic dictators and would-be dictators.

I’ve been busy for the last week doing events for Economics in Two Lessons, so I didn’t have time to take part in the discussion arising from Harry’s post on alternatives to Sanders’ proposal to wipe out college debt.

In one way, that’s a pity because the key point of the book is the idea of opportunity cost – the true cost of anything, for us as individuals, and for society as a whole, is what you must give up to get it. More precisely, it’s the best alternative available to us.

Harry’s post was all about opportunity cost – what would be the best use of $1.6 trillion in public funds. However, the discussion was inevitably enmeshed in the complexities and inequities of US education, while comments making broader arguments about opportunity cost reasoning weren’t discussed in detail.

One of those broader arguments is the idea that, thanks to Modern Monetary Theory, there’s no need to worry about such questions. In the “chartalist” reasoning underlyng MMT, the fact that governments can issue their own sovereign currency means that there is no need to “finance” public spending by taxation; rather taxation is a tool used to manage aggregate demand so as to keep the economy fully employed but not at a point where excess demand creates inflation. That (essentially correct) position can easily slide into the (only subtly different, but radically mistaken) view that governments can spend money on anything they like with no need for any increases in taxes or cuts in other spending.

As I will argue over the fold, a correct version of MMT makes no such claim. Unfortunately, while avoiding the error themselves, a lot of MMT theorists have not shown much willingness to set their more naive followers straight.

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In my previous post about globalization, I concluded that plausible policy shifts (essentially, the continuation and widespread adoption of Trump’s current policies) could bring about a substantial reversal of one element of globalization – the complex global supply chains that now characterize the production of goods. In this post, I’m going to look at migration, which is now the most politically salient aspect of globalization, and argue that even draconian policies are unlikely to do more than slow the most important consequences of migration.
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The term “globalization” came into widespread use in the 1990s, about the same time as Fukuyama’s End of History. As that timing suggests, globalization was presented as an unstoppable force, which would break down borders of all kinds allowing goods, ideas, people and especially capital to move freely around the world. The main focus was on financial markets, and the assumption was that only market liberal institutions would survive.

The first explicit reaction against globalization to gain popular attention in the developed world[1] was the Battle of Seattle in 1999, but the process, and the neoliberal ideology on which it rested, didn’t face any serious challenge until the Global Financial Crisis of 2008. The Crisis destroyed Neoliberalism as a political project with positive appeal, but its institutions have remained in place through inertia.

Now, however, globalization is finally facing serious threats, most immediately from the nationalist[2] right, seeking to restrict movement of people and goods across national borders. There hasn’t yet been any serious challenge to financial globalization, but faith in the wisdom and beneficence of financial markets has disappeared.

An obvious question here is: can globalization be reversed? My short answer is: within current political limits globalization can be reversed least partially in the case of trade, but can only be slowed in the case of movements of people. I’m still thinking about financial flows.

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The 100th anniversary of the Treaty of Versailles is coming back. I have a piece in The National Interest which ran under the headline (selected by the subeditor, as is usual), America Needs to Reexamine Its Wartime Relationships. Keynes first came to public attention with his critique of the Versailles Settlement, The Economic Consequences of the Peace, whith foreshadowed, in important respects, The General Theory of Employment, Interest and Money.

I argue that the rise, fall and rise again of the standing of Keynesian macroeconomics runs in parallel with views on the justifiability of the terms imposed at Versailles and more generally of the use of war as a policy instrument.

Looking back at past posts, it’s enjoyable to find those where I went out on a limb and have been proved right by events, or at least supported by subsequent evidence. A couple of examples

• My 2015 prediction that vaccination would become a partisan issue in the US now seems to be widely accepted. To forestall a repetition of some previous debate, it’s obviously bad that Republicans do bad things, and it would be good if they didn’t. But it’s better to know what we are dealing with than to pretend that it isn’t happening.

• My 2006 analysis of advertising as a public bad is supported by a study claiming to show that advertising is a major source of human dissatisfaction.

It’s less fun when things don’t go as expected. Take Bitcoin as an example. Its uselessness is now even clearer than it was when I started writing about it 2013. Use in legitimate market transactions is almost non-existent, while the darknet illegal markets in which it is the preferred currency are being busted so frequently as to suggest that anyone using them is taking a big risk of losing their money, or worse. Meanwhile, the dream that Bitcoin would justify itself through the magic of blockchain has evaporated. As far as I can tell, cryptocurrencies on the Bitcoin model are the only genuine examples of blockchain technology in actual use (the label has been attached to some other projects for marketing purposes.

I’ve always said that, given the irrationality of markets, no one can predict when Bitcoin will reach its true value of zero, and I was careful to maintain this position when I posted on Bitcoin’s decline below $4000 late last year. Still, I have to admit that I expected this mania finally to come to an end. That hasn’t happened; in fact the price has doubled.

I won’t worry too much about the occasional (or not so occasional) error. My track record is still far better than that of the many pundits who predicted success for the Iraq war and continued claiming imminent victory years after the disaster had become evident. And most of them are still in business, apparently just as credible as ever to their audiences.

I’ve been looking over some posts from the bright dawn days of blogging in the early 2000s. One thing that struck me is that some ideas I put forward as unconventional but evidence based, are now fairly widely accepted. In view of the widespread, and justified, concern about a post-truth era, this seems encouraging, and worth investigating. A few examples

* In this post on equality of opportunity from 2003, I noted that “contrary to popular belief, there is less mobility between income classes in the United States than in European social democracies.” I was drawing on a 1999 book, The Real Worlds of Welfare Capitalism by Goodin, Headey Muffels and Dirven, which I’d reviewed a couple of years previously. In 2009, when I started work on Zombie Economics, I wrote about this again. However, I soon realised I was pushing at an open door. The decline of social mobility in the US had become part of the conventional wisdom.

* In 2004, some of the first studies of charter schools were coming out, showing that, contrary to the widely-shared expectations of education reformers, they weren’t showing any clear gains in student performance. I wrote about this fairly cautiously, noting that studies of this kind often fail to find any effect. As it turned out, however, the findings were replicated, particularly in the case of for-profit schools. This piece in the Washington Post (which used to be associated in some way with the for-profit testing industry, IIRC) shows how much the tide has turned against charters, and even more against for-profits.

* Here’s a post on minimum wages, drawing on the work of David Card and Alan Krueger (whose tragic death recently was a big loss to the economics profession). from the early 1990s. By then, the formerly orthodox view that minimum wages had big negative effects on employment was sufficiently out of favour to be revived in Slate (then famous, or notorious, for “contrarian” views that generally tended to support the establishment).

* Finally, I wrote a couple of mildly snarky pieces about the “Reading Wars” between phonics and whole language. This was one of the relatively rare cases in which the emerging evidence supported the cultural right. It’s pretty hard nowadays to find unequivocal supporters of whole language.

Looking at these examples, there’s a gap of about 10 years between the time the evidence emerged (or at least, emerged prominently enough for me to take notice) and the time the conventional wisdom adjusted. That doesn’t seem too bad. As the great replication crisis has shown, it’s unwise to take too much notice of an individual study on any social science topic.

Unsurprisingly, most of the examples above are cases where the emerging evidence was consistent with my broad political principles (I was never engaged in the Reading Wars, though I mostly lined up against the phonics advocates on other issues). I’d say that’s because most of the evidence we’ve had in the past twenty-five years or so has gone against the beliefs of the political right, who have had to retreat from the triumphalism of the early 1990s. But it’s obviously possible that there is confirmation bias at work. I’d be interested to see suggested examples of evidence shifting the conventional wisdom to the right in this period.

April 23 was the official release day for Economics in Two Lessons. The book is now out in Australia as well Economics In Two Lessonsis now available in Australia from Footprint books. It’s nearly eight years since I started work on the book. I think it’s been worth the wait. The painful process has produced something better than I originally planned, with plenty of help from commenters here and elsewhere.

According to Amazon, the book is often bought along with Crashed, by Adam Tooze, which is great company to be in.

[Begin plug] If you’ve read and liked the book as it appeared here, this would be a great time to contribute a quick review [End plug]

The idea that Trump voters were former Democrats driven by economic anxiety, seems finally to have died. As was clear immediately after the election, most Trump voters had previously voted for Romney, and most of the rest were classic swinging voters who had voted for Republicans as well as Democrats in the past. The remnant of the remnant reflected the drift from Democrats to Republicans of less educated whites that long predated Trump (though it may have helped him win the Republican nomination).

Solving that puzzle, though raises another one. Why were so few traditional Republicans repelled by Trump to the extent that they would vote for Clinton, or else abstain. And why does Trump continue to attract such strong Republican support.

One answer is what might be called “transactional Trumpism“. This is the idea that a large group of Republicans dislike Trump’s racism and misogyny, but support him because of his success in delivering a traditional Republican agenda. The problem I have with this explanation is: what success?

The standard items on the list are: Supreme Court appointments, tax cuts and deregulation. But
(1) these things are the absolute minimum that would be expected from any Republican president
(2) Trump has made a mess of all them
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