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John Q

Bitcoin’s belated bust

by John Q on November 23, 2018

It’s been quite a big week in cryptocurrency markets. The price of Bitcoin has fallen close to $4000, down from a peak of nearly $20 000.

As a longstanding sceptic of cryptocurrencies, it might be thought that I would be taking a victory lap. After all, I have previously written that “Bitcoins will attain their true value of zero sooner or later, but it is impossible to say when.” With the Bitcoin price having fallen by 75 per cent, it might seem that my prediction is well on the way to being justified.

Unfortunately, the second part of my statement, about the impossibility of predicting timing has been proved definitively correct.. I wrote this in 2013 when Bitcoins were valued at around $100, and the total market capitalization was a mere billion dollars. A single wealthy individual could have driven the price to zero by short-selling.

Five years later, and despite the price collapse of the past few months, Bitcoins are selling at nearly 50 times the price I criticized as excessive. Moreover, as cryptocurrencies have proliferated, Bitcoin now constitutes only a fraction of the total market. The capitalization of the cryptocurrency market as a whole is fluctuating still close to $100 billion.

Yet this massive valuation is built on nothing. The idea that Bitcoin, or any of its competitors will provide a new and superior means for buying and selling goods and services has been tested to destruction. Nearly a decade after the currency was launched, the use of Bitcoin in purchases is modest, and rapidly declining.

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Trolls

by John Q on November 18, 2018

I’ve decided that life is too short for me to deal with any more trolls. From now on, I’m following the same zero[1] tolerance policy regarding blog comments as I do on other social media. Snarky trolling comments will lead to an immediate and permanent ban from my comment threads.

More generally, I’ve come to the conclusion that the best way to look at the ‘Intellectual Dark Web’ and what remains of the Republican intellectual class is the light of my experience as a blogger.
Put simply. the IDW and others are trolls. Their object is not to put forward ideas, or even to mount a critique, but to annoy and disrupt their targets (us). As Nikki Haley observed, a few months before announcing her resignation as UN Ambassador, it’s all about “owning the libs
Once you look at them as trolls, it’s easy to see how most of the right fit into familiar categories. They include
* Victim trolls: Their main aim is to push just far enough to get banned, or piled-on, while maintaining enough of an appearance of reasonableness to claim unfair treatment: Christina Hoff Sommers pioneered the genre
* Concern trolls: Jonathan Haidt is the leading example. Keep trying to explain how the extreme lunacy of the far right is really the fault of the left for pointing out the lunacy of the mainstream right.
* Quasi-ironic trolls: Putting out racist or otherwise objectionable ideas, then, when they are called out, pretending it’s just a joke. The alt-right was more or less entirely devoted to this kind of trolling until Trump made it acceptable for them to drop the irony and come out as open racists.
* Snarky trolls: Delight in finding (or inventing) and circulating examples of alleged liberal absurdity, without any regard for intellectual consistency on their own part. Glenn Reynolds is the archetype in the US, though the genre was pioneered in UK print media by the Daily Mail’s long running obsession with ‘political correctness gone mad’
* False flag trolls: Push a standard rightwing line, but demand special consideration because they are allegedly liberals. Alan Dershowitz has taken this kind of trolling beyond parody
From what I can see, the latest hero of the Dark Web, Jordan Peterson, manages to encompass nearly all of these categories. But I haven’t looked hard because, as I said, life is too short.

fn1. Not quite zero. Commenters with a track record of serious discussion will be given a warning. But, anyone who wastes my time will be given short shrift

Brexit: this is it?

by John Q on November 15, 2018

Since the Brexit referendum was hailed by many as representative of a new force in global politics, it’s of interest even on the far side of the planet, and I’ve watched the slow-motion train wreck with appalled fascination.

So, as far as I can tell, the Brexit deal Theresa May has come up with is pretty much the super-soft version. About the only immediate change it will produce is a return to blue passports in place of the EU burgundy, which, it appears, were always optional. And, it appears, the new passports will be printed in France.

All that assumes that the deal will go through. In this context, I’ve been struck by a lot of commentary supporting the deal on the basis that a second referendum isn’t feasible due to the timing requirements of the Referendums Act. Am I missing something here? Isn’t Parliament supreme? And given that this issue has consumed British politics for the last two years or more, can there really be any significant ambiguity about the possible choices articulated by May today: her deal, no deal or no Brexit?

Feel free to comment on these or any other aspects of the issue.

Armistice Day

by John Q on November 11, 2018

It’s 100 years since the Armistice that brought an end to fighting on the Western Front of the Great War. Ten million soldiers or more were dead, and even more gravely wounded, along with millions of civilians. Most of the empires that had begun the war were destroyed, and even the victors had suffered crippling losses. Far from being a “war to end war”, the Great War was the starting point for many more, as well as bloody and destructive revolutions. These wars continue even today, in the Middle East, carved up in secret treaties between the victors.

For much of the century since then, it seemed that we had learned at least something from this tragedy, and the disasters that followed it. Commemoration of the war focused on the loss and sacrifice of those who served, and were accompanied by a desire that the peace they sought might finally be achieved.

But now that everyone who served in that war has passed away, along with most of those who remember its consequences, the tone has shifted to one of glorification and jingoism.

In part, this reflects the fact that, for rich countries, war no longer has any real impact on most people. As in the 19th century, we have small professional armies fighting in faraway countries and suffering relatively few casualties. Tens of thousands of people may die in these conflicts, but the victims of war impinge on our consciousness only when they seek shelter as refugees, to be turned away or locked up.

In the past, I’ve concluded message like this with the tag “Lest we Forget”. Sadly, it seems as if everything important has already been forgotten.

Time to join the generation game? Definitely

by John Q on November 7, 2018

A little while ago, I partially recanted my long-standing rejection of the idea that “generations” are a useful way of thinking about such issues as political attitudes. The UK elections showed a very strong age effect, reflecting the way that the politics of nostalgia, represented by Brexit, appeal to the old and appal the young.

The same appears to be true of “Make America Great Again”, at least according to the exit polls. In every racial group, there’s a clear cohort effect, with the younger cohorts favouring the Democrats.

Exit poll results, by age and race

The Republicans had majority support only among whites over 45.

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Why No One Wins a War over the South China Sea

by John Q on October 18, 2018

That’s the headline for my latest piece in The National Interest. (over the fold)The central point is brilliantly summed up in this clip from Utopia.

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Algorithms

by John Q on September 28, 2018

This is an extract from my recent review article in Inside Story, focusing on Ellen Broad’s Made by Humans

For the last thousand years or so, an algorithm (derived from the name of an Arab a Persian mathematician, al-Khwarizmi) has had a pretty clear meaning — namely, it is a well-defined formal procedure for deriving a verifiable solution to a mathematical problem. The standard example, Euclid’s algorithm for finding the greatest common divisor of two numbers, goes back to 300 BCE. There are algorithms for sorting lists, for maximising the value of a function, and so on.

As their long history indicates, algorithms can be applied by humans. But humans can only handle algorithmic processes up to a certain scale. The invention of computers made human limits irrelevant; indeed, the mechanical nature of the task made solving algorithms an ideal task for computers. On the other hand, the hope of many early AI researchers that computers would be able to develop and improve their own algorithms has so far proved almost entirely illusory.

Why, then, are we suddenly hearing so much about “AI algorithms”? The answer is that the meaning of the term “algorithm” has changed.
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Economics in Two Lessons: Introduction

by John Q on September 23, 2018

The publication date for my new book, Economics in Two Lessons, is set for May 2019. Until then, I’m putting extracts up on a Facebook page I’ve set up. Here’s the first one, part of the Introduction.

Time to join the generation game?

by John Q on September 18, 2018

As regular readers will know, I’ve spent a generation or more [1] deriding what I call the generation game – the idea of dividing the population up into birth cohorts (categories based on year of birth) such as Boomers, X-ers and so on (Millennials weren’t invented when I started) and assigning them various supposed characteristics. Most of the time, this exercise is little better than astrology. To the extent that there is any semblance to reality it simply reflects the fact that young people are, and always have been, different from old people.

But just as I have managed to get some traction with this idea, genuine cohort effects have emerged in politics in many countries. The sharpest case is Britain, where people over 65 voted massively for Brexit in the referendum and the Conservatives in the recent election, while those aged 18-24 went even more sharply the other way. As the map linked here shows, if only 18-24 year olds were voting, based on current polling data, the Conservatives would not have won a single seat[2]. If only those over 65 voted, the Conservatives would win 575 and the combined opposition 54.

This is a massive difference and can’t AFAICT be fully explained by differences in education, ethnic composition and so forth. It also represents a huge shift on the part of older cohorts, who were part of the electorate that gave Labour three terms not long ago. While there is some tendency for people to become more conservative as they age, it’s normally much more limited than this.

The explanation in simple terms, is Brexit. Most of the time, elections involving competing visions of the future. In the UK case, from the 1990s until Brexit, the contest was between hard-line Thatcher-style neoliberalism and Third Way Blairite soft neoliberalism. In the course of such debates, both sides routinely claim to be on the right side of history, to own the future and so on.

By contrast, Brexit represented an appeal to a (partly imaginary) past, against the present and the future. With the exception of a handful of neoliberal ideologues, who saw Brexit as a path to a free-market future, most Leavers were motivated by nostalgia for the glories of the past, and were willing to sacrifice the interests of the young to make a gesture in that direction.

What’s true of Brexit is true, though not to quite the same extent, of the culture war politics that have now become dominant on the political right in much of the English-speaking world. It’s driven in large measure by old men who lost the cultural battles of the 1960s and 1970s, and have never got over the fact.

The result is a situation where the right is appealing directly to members of older age cohorts with the result that younger cohorts are moving left. The most immediate effect has been to wipe out the support base of centrists of the Blair-Clinton-Keating type, who fail to appeal to either group.’m

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Economics in Two Lessons: Acknowledgements

by John Q on August 30, 2018

Nearly seven years after I started, I’ve finally submitted the manuscript of Economics in Two Lessons to Princeton University Press. There’s still a lot of work to be done in turning it into a published book, and some changes are still needed, but this is as close to a milestone as I’m going to get.

Over the fold are the Acknowledgements. As I mention, I’m sure to have omitted someone, so if you have contributed comments and your name is missing, please point this out. Also, if there’s anyone commenting under a pseudonym who’d like me to use their real name, or vice versa, I’ll be happy to make the change.

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Economics, Trumpism and Migration

by John Q on August 11, 2018

It’s obvious enough by now that support for Trumpism in the US and elsewhere is motivated primarily by racial and cultural animus, and not (or at least not in any direct way) by economic concerns. Still, to the extent that Trumpism has any economic policy content it’s the idea that a package of immigration restrictions and corporate tax cuts[1] will make workers better off by reducing competition from migrants and increasing labor demand from corporations. The second part of this claim has been pretty thoroughly demolished, so I want to look mainly at the first. However, as we will see, the corporate tax cuts remain central to the argument.

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Brexit and the oral culture of journalism

by John Q on August 2, 2018

For anyone following the trainwreck of Brexit, Richard North’s eureferendum.com is an indispensable source. North was (and, at least in principle, still is) a Leave supporter, proposing a model called Flexcit (roughly, the Norway/EFTA/EEA option), but has long since broken with May, Johnson and the rest of the Brexiteers.

North is scathing about the low level of analysis of just about everyone involved in the debate, the only consistent exceptions being Pete North (not sure if or how they are related) and his former employer Christopher Booker who, despite being on the denialist fringe of the climate debate, seems to make sense on Brexit.

I’ll ask a question about Brexit over the fold, but I mainly wanted to cite this important observation. Attacking a recent report, he writes that the author

proudly announces that his piece “is based on conversations” with certain prestigious persons, rather than to reference to primary sources. This so typifies the “oral culture” approach of what passes for journalism, with not even a passing reference to the Commission’s Notices to Stakeholders.

It is probably this superficial, prestige-driven approach which defines the popular Efta/EEA narrative. The average journalist would have a nose-bleed if they ever had to look at a copy of the EEA Agreement. In-depth “research” means looking up back copies of the Financial Times. As for the politicians, they seem to make it up as they go along.

The point about the oral culture is spot-on, I think. I remember observing long ago that journalists, unlike bloggers, assume that they can ring anyone up about anything and expect an answer. That has a huge influence on the way the media work.

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Some big news …

by John Q on July 24, 2018

… least for me. Princeton University Press has agreed to publish my book, Economics in Two Lessons: Why Markets Work and Why they can Fail so Badly. I’ve been working on it for seven years, but it’s finally done. It should be published in the first half of 2019.

Stay tuned for news on a possible Australian edition.

Nearly seven years after I started work, here’s the final draft chapter from my book-in-progress, Economics in Two Lessons. Thanks to everyone who commented on the first 15 chapters and encouraged me in the project as a whole.

I’ve had quite a few amusing snarks on Twitter to the effect that 16 chapters and 90 000 words is an awful lot for just two lessons. That’s true and yet there are even more topics I wanted to cover. In particular, I wrote quite a bit on health and education but have had to omit most of it for space reasons. Still, if anyone wants to point out critical omissions, now’s the time.

Comments, criticism and praise are welcome. I’m also on the lookout for telling graphs, insightful illustrations and apt quotations.

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Economics in Two Lessons Chapter 15

by John Q on July 3, 2018

My long-running book-in-progress, Economics in Two Lessons is nearly done. Thanks to everyone who commented on the first 14 chapters.

Here’s a draft of Chapter 15: Monopoly and the Mixed Economy. Only one more chapter to come after this

Comments, criticism and praise are welcome.

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