There’s been a lot of back and forth about economic reasoning and the EU. This article by Kevin O’Rourke, takes a different perspective, one that is well worth reading, exploring the consequences of economists’ handwaving over utility for the technocratic politics that we face today. I’ve seen other efforts to make this kind of case, but they haven’t been nearly as clear or accessible.

If there’s to be any chance of stabilizing the global climate, a large proportion of existing reserves of coal will need to be left in the ground. The Galilee Basin in Queensland, estimated to contain 27 billion tonnes of coal, enough to raise atmospheric concentrations of CO2 by several parts per million on its own, is arguably the biggest test case in the world right now. Fortunately, the latest news is good.

The critical project is the Carmichael Mine proposed by Indian conglomerate Adani . To get the coal out Adani proposed a new rail line and a port expansion at Abbot Point. A Korean conglomerate, POSCO (originally a steelmaker)m was named as the builder of the railroad, with the prospect that POSCO would take an equity share and the Korean Export-Import Bank would lend money on favorable terms. If the rail line is built, other projects could go ahead. One such project, owned by Bandanna Coal (now in receivership) was just approved by Environment Minister Greg Hunt.

It now seems clear that Adani is mothballing the project. A month ago, the engineering design teams were told to stop work, and now Posco’s contractors have been sent home. Coincidentally or otherwise, Posco has announced the intention to return to its steelmaking roots, with aggressive cuts to its engineering and construction divisions.

Adani is still blaming regulatory delays, but this seems increasingly implausible. The sacking of the engineering teams will set the project back many months, if not years, and burning your primary equity partner doesn’t seem like a sensible response to regulatory problems. At this point, I’d say the strategy is to obtain and bank the regulatory approvals then hope that the price of coal increases in the future. This seems unlikely, given the collapse of demand in the US, declining demand in China and increasing Indian focus on renewables, in which Adani itself is a big player.

Moreover, with every year that passes, the obstacles to coal projects of any kind get bigger. Most international development banks will no longer lend to such projects, global banks are under similar pressure and institutional equity investors are being pushed to divest. It’s unlikely that the proponents of new coal projects in Australia will ever again see a government as favorable as the Abbott government, so if they can’t succeed now, they will probably never do so.

I got a new iMac. Awesome! Until last week I was using my old iMac, from 2009. I buy a good one so it will last. It’s amazing how one day in front of the retina display makes me think ‘yuck!’ looking at my tired old, burnt out 2009 display. But onward, to the future! [click to continue…]

WASHINGTON, DC – APRIL 21: Thomas L. Friedman speaks during a rehearsal before a taping of Jeopardy! Power Players Week at DAR Constitution Hall on April 21, 2012 in Washington, DC. (Photo by Kris Connor/Getty Images)

Tyler Cowen argues that the concept of “Very Serious People” refers to people who “realize that common sense morality must, to a considerable extent, rule politics.” I’m not either the originator nor the popularizer of the term, but I think that’s wrong. As I understand it, the theory underlying the concept of Very Serious People is as follows.

1. Everyone has a mix of beliefs, some of which are right, and some wrong.
2. Everyone co-exists in a social system that tends to value, heavily reinforce and widely disseminate some people’s beliefs while disparaging, heavily discounting, and tending to limit the circulation of certain other people’s beliefs. This bias is not random, but instead reflects and reinforces existing power structures and asymmetries.
3. People whose beliefs are reinforced and widely circulated so that they are socially and politically influential, even when they are manifestly wrong, are Very Serious People. The system provides them with no incentives to admit error or perhaps to understand that they have erred, even when their mistakes have devastating consequences.

Or: Shorter Theory of Very Serious People.

1. Being Tom Friedman Means Never Having To Say You’re Sorry.
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I’m still preparing to teach Nietzsche. Today I was rereading “The Convalescent”, in Zarathustra – the key chapter in which the animals clue Z. in that his job shall be to teach Eternal Recurrence. A minor linguistic detail auf Deutsch: he is moping in the depths of his most abysmal thought and they – the animals – sing to him about how everything that goes around, comes around, and he calls them ‘barrel organs’ [Drehorgeln] and accuses them of bothering him with a mere Leier-Lied. Which seems like it should just be translated ‘lyre-song’, which it has been. But the Del Caro translation is ‘hurdy-gurdy song’. Which seems a bit unnecessarily far from the original. Curious, I put ‘Leier-Lied’ in Google translate and got ‘lyre-lay’. But then I tried ‘Leierlied’ – no hyphen – and got ‘gurdy song’. Is that a thing? (Obviously I have too much time on my hands.) ‘Hurdy-gurdy’ in German is Drehleier. Leierkasten, by contrast, is a synonym for barrel-organ, so it makes sense that the translator would make a connection. Both barrel-organs and hurdy-gurdys operate by means of cranked cylinders, which makes sense: Zarathustra is complaining that the animals’ philosophy is just cylindrical crankiness. Round and round and round. Very lowbrow stuff. The animals set Zarathustra straight and tell him he needs to make himself a new Leier, so he can sing this song himself, because this is totally his jam. At this point there is no question of translating it as ‘hurdy-gurdy’. Dude is in the middle of nowhere and those things are very complicated engineering feats. He’ll be lucky to string a few strings on a frame, to sing to the sheep, thank you very much. [click to continue…]

I couldn’t get to a computer yesterday and photoblogging from a mobile device proved beyond my powers, so Sunday photoblogging has changed to Monday for this week.

I’m now coming up to (what I hope will be) the most challenging part of my book-in-progress, Economics in Two Lessons. The core theoretical point the first part of the book (Lesson 1) is that, under a set of ideal assumptions, competitive equilibrium prices both reflect and determine the opportunity costs faced by consumers and produces. This means that there is no way to rearrange consumption to make someone better off unless someone else is made worse off. (I’ve already mentioned my reasons for avoiding the term “Pareto-optimal” in this context.

What I’m trying to do here is to spell out the logic underlying these results in a way that foreshadows the discussion of market failure and income distribution, in Lesson 2, but still shows the power of market mechanisms. I’ll probably need a few goes at this, and this is my first try. Critical comments on everything from the underlying theory to editorial nitpicks are welcome. Sincere praise is also welcome of course, but constructive criticism is best of all.
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The neocons have been wailing and gnashing teeth over the abysmal awfulness of the Iran deal. Meanwhile, everyone else says it’s good or, at worst, better than the alternatives. I am a creature of irony so it is hard for me to discuss the situation rationally. I would like to mock the neocons but what is the irony? Dog chases car. Dog catches car. What’s a dog to do? Bite it! So this is dog-bites-car. That’s just neocon nature.

But here’s something a bit ironic, so I’ll pass it on. The most eloquent, pithy assessment I have read on the subject is from Pat Buchanan, gaming out GOP rejection: [click to continue…]

Ruth Rendell died in May. I never exactly loved the Wexford novels (I did love George Baker as Wexford on TV, though), but her non-Wexford novels were great, especially the mature Barbara Vines. I stopped reading her altogether in the late 1990s, only on the very sensible grounds that at some point I would have a lot of her novels to read (I started devouring them about 8 months ago, co-incidentally). She is the last to die of what I thought of as the post-Julian Symons triumvirate of great English crime writers — her, PD James, and Reginald Hill.

But in the past few years I’ve been discovering a host of fantastic successors to recommend to you [1]. Here’s the first.

William Shaw. Of my candidates, Shaw is the one you are most likely to have missed. I can’t even remember how I came across the first book She’s Leaving Home (UK title, inferior in my opinion: A Song from Dead Lips ). It is the first in a projected trilogy all set within a few weeks at the end of 1967 and beginning of 1968; focused on an Irish-English cop in his thirties with a female side kick (or, as my son sometimes confusedly calls it, ‘kick-butt’ about 10 years his junior. I just finished the second, The Kings of London (inferior UK title: A House of Knives ) and already find it hard to believe that Shaw will stop at three. Prerequisites for qualifying as a successor to the triumvirate are tight plots that, while complex, do not strain credibility too much, good characterisation, and fluent prose. Shaw does all that. But he also creates the feel of a world which is changing rapidly in ways that some of the protagonists only dimly understand: he is early-Mad-Men-like in his insistence on period detail. And Mad Men-like, for that matter, in both his portrayal of the casual sexism of the time, and of the interesting women who are the recipients of it. It takes a while — quite a while — to get used to his sparse, depressive, prose, but that is a key part of the immersive experience of reading the novels. As I’ve indicated, the first two books both have different titles in the US than in the UK (incredibly annoying!!) and for what it is worth, better the US titles are better (in fact, about half way through the first I wondered why it was not called “She’s Leaving Home” — and then found that, indeed, that was the US title). So be warned if you are buying — only buy each one, once.

An aside: also well worth reading is his other book, Spying in Guru Land: Inside Britain’s Cults, in which he does numerous things that no IRB would approve, is a very balanced assessment of cult life, and is genuinely illuminating about the Waco massacre.

[1] Warning: as will become clear later on, not all of these successors are English, I’m including Scots and Irish, and will include Welsh if anyone can either recommend a good Welsh one, or convince me that one of my candidates is, in fact, Welsh.

As a university employee, I am required to document expenses incurred on university business, in order to be reimbursed. In a place like the United States, with its abundance of electronic transactions, this is easy. In places with more informal economies, not so much. For example, the family that cooks for us in the Dominican Republic when we travel there for the Northwestern Access to Health Project charges us a daily rate for that much appreciated service, but has never given us a bill or a receipt. It’s just not the done thing.

Mali is a special case.

Vendors in Mali, from the shoemaker to the café owner, produce more elaborate documentation of transactions than I’ve ever seen anywhere else. On the planet. Every humble place of business has not only personalized stationery, but also – the icing on the cake – its own stamp, bearing name and location, imprinted with official firmness on every bill and receipt.

I’ve eaten meals in Mali where the restaurant has no meat and no other customers, but whatever I do eat is documented with a stamp.

A musical troupe that does health and human rights education with us recently entered into an agreement to perform in five villages around Douentza. This agreement was memorialized with the band leader’s signature – and a stamp.

After a team dinner in Sevare, I received a meticulously itemized bill. I paid the check and afterwards received an apologetic visit from the owner. He had forgotten to stamp the bill; should he rewrite it from scratch? He seemed surprised when I told him that wasn’t necessary.

How this came to be the norm is a mystery to me. Is it a legacy of the French colonial era? Perhaps, but on a recent faculty exchange to Sciences Po in Paris, while I was required to produce elaborate documentation in order to receive compensation there, there was nary a stamp in sight. Is it insurance against those who would gin up phony receipts for reimbursement? Maybe, but surely it’s not difficult to order a stamp that says whatever you want.

Regardless, stamp vendors do a brisk business in Mali, each stamp lending an imprimatur of legitimacy to the act in question. Do they matter? At first, I thought not, dismissing them as a meaningless cultural construct, but I was wrong. In Mali, the stamps are a mark of integrity. And that matters a lot.

I’m sure I’m not the only person who’s been thinking about the words Thucydides assigns to the Athenians in the Melian dialogue

The strong do as they will and the weak suffer what they must

And I knew the immediate context. Militarily powerful Athenians demanded that the inhabitants of neutral Melos surrender their city and pay tribute. When the Melians refused, Athens invaded, slaughtered the men and enslaved the women and children.

I didn’t however, have any broader context in which to place this episode, even though the information is readily available on Wikipedia for example, which is my source here (apologies in advance to any actual experts for inaccuracies). The story begins with the formation of the Delian League, an expression of Greek unity in the war against Persia. The Athenians used the League to supplant Sparta as the hegemon of Greece, and then to oppress the other members, leading to a series of attempted defections. In Thucydides words

Of all the causes of defection, that connected with arrears of tribute and vessels, and with failure of service, was the chief; for the Athenians were very severe and exacting, and made themselves offensive by applying the screw of necessity

Eventually, this policy led to the outbreak of war with the Spartan-led Pelopennesian League (this war was Thucydides’ subject). The attack on Melos took place during a brief period of peace about half way through the war. The war ended with Athens being utterly defeated. Only the mercy of the Spartans prevented the Athenians sharing the fate they had meted out to the Melians a decade earlier, as Sparta’s allies demanded.

Rather than extract analogies to current events, I’d like to observe that the historical setting suggests a very different reading of the dialogue to that commonly seen today. In most of the contemporary discussions I’ve read, the Athenian side of the dialogue is presented as embodying the remorseless logic of power politics. But in the light of the outcome (well known to his intended readers), it seems to me Thucydides is better read as showing the Athenians as subject to the kind of hubris that demands, and inevitably receives, punishment. By contrast, while the Melians made a bad bet in resisting, their arguments are entirely sound, and should have been convincing to a rational hegemon.

Those whom the gods wish to destroy, they first make mad.

Everyone who’s anyone knows Isaiah Berlin’s essay, “The Fox and the Hedgehog”, written around the postulate that “the fox knows many things, but the hedgehog knows one big thing.” It’s a good essay, although too famous for its own good. I would not presume to dispute the divine wisdom of Archilochus. But I’ve always thought that, applied to academic philosophy, the following would be more apt: the fox knows a variety of medium-sized things, the hedgehog knows an extremely large number of small things. Generalists, specialists. And having Big Ideas is yet a third thing. Having One Big Idea isn’t like slipping through the dappled forest, lightly, alertly. But it also isn’t waddle, hunker, clench. Waddle, hunker, clench. Write a tight little article, in which you anticipate 14 objections to your point and answer them, one by one. Defending yourself by preemptively making it too much bother for a potential predator to attack you from any conceivable angle is a classic academic tactic, but not a Big Idea thing. [click to continue…]

Obviously, my analysis of the Greek debt crisis was wrong. My crucial error was the assumption that, having held the referendum and being faced with an unacceptable offer, Tsipras would choose exit from the euro rather than capitulation. Judging by this interview with Varoufakis (H/T Chris), that’s what Tsipras thought too, until, too late, Varoufakis told him it couldn’t be done. Certainly Tsipras’ actions were consistent with that interpretation.

Syriza has clearly been beaten. But I doubt that the outcome will work well for the other side in the long run. (Nearly) everyone understands that the debt can’t ultimately be repaid. But the German voting public hasn’t been told that. A deal that had some kind of quasi-automatic mechanism for writing down the outstanding balance (for example, by multiplying up the proceeds from asset sales) might have got around this problem. As it is, an explicit writedown will be needed at some point, presumably after Syriza has been forced out of office. That will be incredibly unpopular in Germany, while making clear to everyone else the locus of sovereignty in the post-crisis EU.

Update Commenters generally disagree with my take on the Varoufakis interview. I’m not wedded to it. The crucial point is that exit from the euro is extremely difficult, and that this fact will be used to punish any eurozone country that tries to resist the controlling powers.

As we wait to see whether Europe can survive in its current form, I thought something from Alsace would be suitable.