Globalisation

My last post about migration focused on the predictions of economists about the effects of open borders. Commenter Oliver made the point, surely correctly, that, given social, cultural, economic, and political feedback effects, it is simply impossible to know. But there are other ways of thinking about the issues other than looking at the aggregate consequences. For example, we can focus on the rights of individuals to seek new lives, associates and opportunities and on the rights of groups, peoples, states and nations to exclude outsiders. The unilateral right to exclude is well-represented in the literature, especially be the work of Christopher Heath Wellman (see his contribution to the excellent Debating the Ethics of Immigration: Is There a Right to Exclude? (with Phillip Cole arguing the opposite cases)).

Such works, though, typically address the issues at a somewhat idealized level, asking what rights (properly constituted legitimate democratic) polities do or don’t have. That doesn’t necessarily provide adequate guidance in the actual world; nor does it tell voters who think their state has the right to exclude whether or not to support exclusionary policies. Those strike me as very pertinent questions. Proponents of highly liberalized migration policies are often chastised for being insufficiently alive to the political realities. But a fair response to the self-styled realists is to ask, given the way things are, what they are actually prepared to countenance.
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Let me begin with an apology—for two things, actually. First, for the fact this response to the seminar on my debt book was so long in coming. It happening that at the time the seminar was going on I was desperately trying to finish a book with a very firm deadline (not to mention I was also struggling with a flu, which added all sorts of interesting complications. I did finish it though. Only just.) Second, for the fact that, to make up for the delay, I seem to have overcompensated and the response became… well, as you can see, a little long.

Sorry.

Allow me also to remark as well how flattered I am by so much of this discussion. When I wrote the book it never occurred to me I would end up being compared with the likes of Polanyi, Nietzsche, or even Ernest Mandel. I shall try very hard not to let this go to my head. Now how shall I start? It would be ungracious not to respond to each in some way. But I think it might be best to start by clarifying a few issues that seem to crop up pretty frequently, both in this seminar and in other reviews and comments I’ve seen on the internet. Then I will take on the specific responses.
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Will Hutton had a piece in the Observer a week ago about immigration policy in the course of which he made the following remark:

bq. the European left has to find a more certain voice. It must argue passionately for a good capitalism that will drive growth, employment and living standards by a redoubled commitment to innovation and investment.

I’m not sure who this “European left” is, but, given the piece is by Hutton, I’m thinking party apparatchiks in soi-disant social democratic and “socialist” parties, often educated at ENA or having read PPE at Oxford. I’m not sure how many battalions that “left” has, or even whether we ought to call it left at all. Anyway, what struck me on reading Hutton’s remarks was that calls for the “left” to do anything of the kind are likely to founder on the fact that the only thing that unites the various lefts is hostility to a neoliberal right, and that many of us don’t want the kind of “good capitalism” that he’s offering. Moreover in policy terms, in power, the current constituted by Hutton’s “European left” don’t act all that differently from the neoliberal right anyway. In short, calls like Hutton’s are hopeless because the differences of policy and principle at the heart of the so-called left are now so deep that an alliance is all but unsustainable. That might look like a bad thing, but I’m not so sure. Assuming that what we care about is to change the way the world is, the elite, quasi-neoliberal “left” has a spectacular record of failure since the mid 1970s. This goes for the US as well, where Democratic adminstrations (featuring people such as Larry Summers in key roles) have done little or nothing for ordinary people. Given the failures of that current, there is less reason than ever for the rest of us to line up loyally behind them for fear of getting something worse. Some speculative musings, below the fold:
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“Matt Yglesias”:http://yglesias.thinkprogress.org/2010/11/the-luck-of-the-irish/ on the horrors of the Irish economy.¹

bq. Today of course Ireland is a total disaster. I wouldn’t try to blame their property crash on low tax rates. But by the same token a frightening number of pundits went “all-in” on the idea that Ireland’s conserva-friendly tax policies were behind a boom that was in fact driven by a real estate bubble.

I personally _would_ try to blame a fair chunk of Ireland’s property market crash on low corporate tax rates.
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This is pretty good, though it tails off towards the end. The material about breaking the “colour bar” on the Bristol buses, the St Paul’s riot of 1980 and the growth of drugs in the 1990s is all very well done. (Best seen by going to “Playlist”:http://www.youtube.com/watch?v=HvI01RauSKU&feature=PlayList&p=70E1676A5ED3BE2A&playnext_from=PL&playnext=1&index=1 )

“Chris Blattman”:http://chrisblattman.com/2010/01/14/whats-even-better-than-giving-money-to-haiti/ passes on a suggestion (for American readers).

Giving money to Haiti doesn’t seem like enough? Katmanda have another suggestion: grant Haitians Temporary Protected Status.

TPS is a form of temporary humanitarian immigration relief given to nationals of countries that have suffered severe disasters, natural or man-made. (For example, El Salvador got TPS was after the country was hit by a terrible earthquake in 2001, Honduras after Hurricane Mitch in 1999, and Burundi, Liberia, Sudan, and Somalia were designated because of ongoing armed conflicts.)

Once a country has been given TPS, its nationals who are in the United States can apply for work authorization (a very useful thing to have if, say, one needs to send money home to family members in need of medical care or a house that has not been reduced to rubble), can’t be deported or put into immigration detention (also quite handy if you’re trying to work and send money home), and can apply for travel authorization, which allows them to visit their home country and return to the US, even if they wouldn’t otherwise have a visa that would allow them back into the country (incredibly important if you have loved ones who have been badly hurt and need to visit them, or if you need to go home to attend funerals).

To support TPS, contact the White House “here”:http://www.whitehouse.gov/contact. You’ll need to select “I have a policy comment”, and “Immigration” from the drop-down menu.

Several years ago, Andrew Glyn sent me a copy of his new book, Capitalism Unleashed, which I promised to review. But with one thing and another, I didn’t get to it, and then I received the news of his premature death, which set me back still further. I promised myself that I would do the review as a tribute to Andrew’s memory, and now, I’ve finally managed to do it.

Of course the environment now is radically different to the one in which the book was written, and that means the review must be to some extent informed by the wisdom of hindsight. In the introduction, Andrew notes as the first of the big open questions thrown up by the unleashing of capitalism

Will the ever more complex financial system implode in a major financial crisis and bring prolonged recession

We all know the answer now.

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Over at our joint I’ve been doing a fair bit of “this day seventy-five years ago” because of the anniversary of Roosevelt’s hundred days and, well, because. This one may hold some interest for an international readership:

On this day in 1933, British Prime Minister Ramsay MacDonald delivered an address from the National Press Club in Washington, DC, discussing the common problems of the US and UK: “In America at this moment and in Great Britain there are millions of men who want work and can’t get it…. Governments cannot be indifferent to a state of things like that.”

MacDonald looked forward to “wise international government action,” to be established at the upcoming international economic conference. He hoped it would revive “a freely flowing international exchange,” i.e., trade—“Self-sufficiency in the economic field on the part of nations ultimately ends in the poverty of their own people.”

He was mindful of the apparent irony in Britain’s having taken the nationalist, defensive action of going off the gold standard: “Can you imagine that in the early days of that crisis we said gayly and light-heartedly, ‘Let it rip. Let it rip. We will go off gold. There are benefits in being off gold, and we will reap them.'” Obviously he meant the answer to be “no.”—“And so on this currency question, agreement is the only protection.”¹
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Tonight’s selection goes with last night’s. Late 1860’s US SF. Ergo, for fun, another Lulu edition.

"No," said Q. bravely, "at the least it must be very substantial. It must stand fire well, very well. Iron will not answer. It must be brick; we must have a Brick Moon."

Along with The Epic of Gilgamesh and The Three Little Pigs, Edward E. Hale’s "The Brick Moon" (1869) is one of the three great brickpunk classics of world literature.

Sandemanian technopreneurs look to the bold, bricks & mortar future, with a flywheel-launched, satellite-based global positioning system; but learn valuable life lessons instead.

Brick. It’s awesome stuff.

"The Brick Moon" was originally serialized in The Atlantic Monthly. And there is an interesting thematic connection with the Steam Man, above and beyond the nigh simultaneous publication. Apparently the inspiration for the Steam Man was – the BigDog of its day – this. "However, by observing carefully the cause of failure, persevering and perfecting the man-form, and by substituting steam in place of the perpetual motion machine, the present success was attained." Words to live by.

As I was saying, in "The Brick Moon", our protagonists are likewise weaned off unreal dreams. "Like all boys, we had tried our hands at perpetual motion. For me, I was sure I could square the circle, if they would give me chalk enough." Then, having put away childish things, they are soon enough hyrodynamically flywheeling tons of bricks into the lower atmosphere.

Here’s a free PDF.

Arguably, this version of the three little pigs is even better.

If you are more old school, here’s Gilgamesh: "Go up on the wall of Uruk and walk around, examine its foundation, inspect its brickwork thoroughly. Is not (even the core of) the brick structure made of kiln-fired brick, and did not the Seven Sages themselves lay out its plans?"

Brick. Awesome.

Some of the things that are most interesting to international political economy scholars such as meself are notoriously difficult to measure. To take one example, there’s a lot of muttering in the US and elsewhere about international trade, whether multilateral and bilateral trade deals are good or bad for the US economy, and so on (these debates also have close equivalents in Europe and elsewhere). But how to cut through the hype to figure out whether or not there is a real likelihood of change in the current regime or not? The usual approach is to look for an indicator variable of some variety that will allow you to track underlying processes that you can’t directly measure. I think I’ve found one – and it’s _at least_ as good as the Economist’s famous Big Mac index for figuring out shifts in PPP. My claim is that the degree of rhetorical overkill in Jagdish Bhagwati’s op-ed fulminations on trade is a very good indicator of what the free trade establishment actually thinks about the underlying risks or threats to the existing regime, and (to the extent that this establishment is politically plugged in) a plausible leading indicator of what’s likely to happen in the future. I’ll endeavour to test this hypothesis by keeping track of the Bhagwati Blood Pressure Index (or BBPI) over a period of time, and testing whether it maps well onto the expected outcomes.

Bhagwati’s piece in today’s “FT”:http://www.ft.com/cms/s/0/f24fa1c4-e92b-11dc-8365-0000779fd2ac.html is a good place to start. Those unfamiliar with his writing style might think that language such as “faintly ludicrous,” “denigration of freer trade,” “witless fear of trade,” and “disturbingly protectionist” indicates a BBPI that is alarmingly high, both for free trade and for Professor Bhagwati. Comparative analysis with previous op-eds and writings would suggest, however, that these criticisms are almost genial by historical standards; at worst they’re love taps. By my reading, the BBPI has dropped quite significantly since mid 2007 or so, suggesting that the free trade establishment believes that the current fervor over free trade is froth that will mostly disappear after the primary season. On the evidence of this article, we may expect the BBPI to drop still further if Barack Obama is elected President (one presumes that Bhagwati believes Austan Goolsbee’s representations to the Canadian government), but to rise substantially in the unlikely event that Hillary Clinton snatches the crown. Also of interest is the evidence that the article provides on the mental modelling processes that underlie these empirical predictions:

whereas Mr Obama’s economist is Austan Goolsbee, a brilliant Massachusetts Institute of Technology PhD at Chicago Business School and a valuable source of free-trade advice over almost a decade, Mrs Clinton’s campaign boasts of no professional economist of high repute. Instead, her trade advisers are reputed to be largely from the pro-union, anti-globalisation Economic Policy Institute and the AFL-CIO union federation.

Clearly then, your soundness on trade depends on the extent to which your campaign employs economists whom Professor Bhagwati approves of. I suspect that Hillary’s campaign is doubly damned because it’s supported by Paul Krugman (whom professor Bhagwati condescendingly refers to as an apostate ‘former student’). Nor had I hitherto realized that the economists of the ‘pro-union, anti-globalisation Economic Policy Institute’ were unprofessional economists of little repute; silly me.

Update: “Megan McArdle”:http://meganmcardle.theatlantic.com/archives/2008/03/a_fair_trade_index.php suggests that a basket of pundits would be preferable.

I’ve been too busy with teaching responsibilities the last several days to link or respond to various posts that other people have put up on taxes, collective goods, and related questions, so I’m going to declare intellectual bankruptcy, and just tell you to read “Laura McKenna”:http://11d.typepad.com/blog/2008/02/more-on-the-tax.html, “Will Wilkinson”:http://www.willwilkinson.net/flybottle/2008/02/22/moral-duties-in-contexts-of-partial-compliance/ and “Russell Arben Fox”:http://inmedias.blogspot.com/2008/02/taxation-and-democracy-101-on-lucky.html. But I also wanted to point to some interesting stuff that’s been happening in Germany, which is sort of related to this question. The _Financial Times_ has been running stories for the last week or so about a disgruntled former employee of a Liechtenstein bank, who has sold a list of the beneficial owners of various trusts in Liechtenstein to the German tax authorities for several million dollars.
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Martin O’Neill has “an interesting review”:http://www.newstatesman.com/200802210046 of a new book about Starbucks.

bq. In the centre of Xi’an, the ancient Chinese capital, there is a gleaming concrete and glass Starbucks. Although a caramel macchiato costs more than a slap-up lunch for four in any of the city’s traditional cafes, this has not stopped it from doing brisk business.

Read the whole thing, as they say.

Here are the things most people would happily pay for at an international transit airport:
– a shower
– clean underwear (for those of us who habitually forget to pack it)
– daylight
– an exercise facility to help with the jetlag and minimise DVT
– nutritious but not too heavy food
– a nap, lying flat, somewhere quiet.

And here’s what is generally available:
– Gucci
– Chanel
– l’Occitane
– Bodyshop
– Lacoste
– Nike
– a few plastic seats
– McDonalds, dougnuts, and the local variety of fried, sugary dross to add a sugar hangover to your jetlag.

Sometimes there’s a shower, and I’ve even heard of napping capsules – though never in the terminal I’m in. But generally, the big transit airports totally mismatch the actual desires of travellers, and instead lay on miles of the same over-priced globalised tat (Swarovski, anyone?) for the miserable and jetlagged to wander about in.

Is the idea that we’ll buy a Cartier watch because we’re so tired and addled? Or are ‘we’ such wealthy and time-poor businessmen that we’ll buy any shiny expensive thing we see for our neglected wives and mistresses? At Bangkok airport recently, most of the travellers were wearing tracksuits and carrying babies. Chanel, Prada and the rest of them were completely empty. Though at least there are showers and a spa in that airport. But all I wanted to buy was clean knickers and a mobile phone – and the result was 2-nil to the airport. At least I didn’t succumb to those silk and wool scarves they have in every airport in the world, but that only French women wear.

So why the complete mismatch of trapped and exhausted consumers to luxury goods? Surely the airports have woken up to the fact that travelling is mass market. Or are travellers such a captive market that airports can completely ignore what they actually want…?

This “unashamed mash note”:http://newsweek.washingtonpost.com/postglobal/bill_emmott/2007/04/not_decline_but_rupture_with_t.html from Bill Emmott, former editor of the _Economist_ presents a class of a triple-distilled tincture of the prevailing globollocks on Sarkozy’s victory in France. You don’t need to read the actual column to get the gist; just the Pavlovian dinner-bell talking points that it strings together.

France … paralyzed by powerful interest groups … political elite … beholden … or … afraid … takes a brave outsider … precisely Sarkozy’s appeal … Reagan or a Thatcher … A “rupture” is what France needs … showing that his country is not doomed to decline … cadres of highly globalized managers … etc … etc

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