Catallaxy Files

polymathic pontification, bleeding heart economic rationalism and liberal secularist contrarianism

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    Thursday, February 26, 2004
    The Liberal party - the party of incumbent businesses and corporate welfare
    The nominally 'free market' Liberal party rejects deregulatory legislation:

    The NSW Opposition will not support legislation to deregulate the liquor industry and is expected to harness enough support from independents to scuttle the bill.

    The unexpected move, led by the Opposition spokesman on gaming and racing, George Souris, resurrects the threat of further multimillion-dollar fines if NSW is unable to satisfy National Competition Council requirements for deregulation ...

    The new legislation, known as the National Competition Policy Amendments (Commonwealth Financial Penalties) Bill 2004, aims to scrap the controversial "needs test" under which bottle shops or hotels can object to new competitors on the grounds another outlet would flood the market. This would be replaced by a system in which applications for new liquor outlets have to undergo an appraisal regime similar to the one used for poker machine licence applications.

    The Government bill, which the Opposition will reject in its entirety, also contains moves to deregulate optometrists, dentists, pharmacists and the poultry industry and changes to the farm debt mediation system, which the Opposition supports.

    Wednesday, February 25, 2004
    Is libertarianism a Jewish conspiracy too?
    Long time readers of this blog will know that I've long expressed concerns about the ideology of foreign policy 'neo-cons' who want the US to engage in an idealistic Wilsonian mission to bring liberal democracy to the Middle East through direct interventions in countries like Iraq, Syria and Iran.

    I accept that leading neocon intellectuals within the Bush Administration most probably were influential in pushing the US towards a more aggressive stance on Iraq that eventually culminated in the invasion of Iraq. I also accept that for these neocon intellectuals, weapons of mass destruction were probably not the main motivation for invasion though it has been used by other members of the Bush administration as a convenient reason. I've also expressed concern about the lack of real-politik involved both in formulating and eventually implementing the invasion - for instance, I think that it's plausible that the invasion may have been the least effective means of dealing with WMD concerns (notwithstanding its benefits in other areas), and I think it's plausible that the obvious transparency of using WMDs as a smokescreen has been a setback for future genuine realpolitik cases for invasion (because of the 'boy who cried wolf' syndrome). I also accept that many of the leading neocon intellectuals close to the Bush administration are Jewish. All these arguments and observations can and should be made without recourse to name-calling about anti-semitism.

    However, what isn't so sensible and needs to be distinguished as reeking of conspiracy theory-mongering is this silly little piece on the anti-globo website Adbusters titled 'Why won't anyone say they are Jewish?' which has been the subject of much debate in the blogosphere. Essentially what the Adbusters article alleges is that US Jewish neocons close to the Bush administration form a fifth column which put Israeli interests above US interests and pushed for war and future agressions against the Middle East in order to use the US army as a convenient means of toppling threats to Israel's security:

    A lot of ink has been spilled chronicling the pro-Israel leanings of American neocons and fact that a the disproportionate percentage of them are Jewish. Some commentators are worried that these individuals ? labeled ?Likudniks? for their links to Israel?s right wing Likud party ? do not distinguish enough between American and Israeli interests. For example, whose interests were they protecting in pushing for war in Iraq?

    Now can one distinguish between making serious criticism of neocon attitudes and the argument made by the Adbusters piece? Of course - if we read the neocons and take them at face value rather than reading secret motives into them without any basis from the text itself, what is so concerning about the neocon attitude to foreign policy is precisely how idealistic it is in its Wilsonianism, not how Machiavellian it is. One would have less cause for concern if they were truly Machiavellian. Yet the Adbusters piece essentially implies, if one takes it seriously, that all these neocons have been using their idealistic visions about implanting ldemocracy throughout the world through a sort of liberal imperialism as a 'cover' for furthering what is really an Israeli national security agenda.

    What is equally disturbing is that the conspiracy theory alleged in the Adbusters piece is quite clearly premised on the ethnicity of neocons in a way which is really quite impugning of the motives and patriotism of that ethnic group. Are neocons disproportionately Jewish? Yes, it seems that way.

    Are they disproportionately Jewish because their Jewishness made them Israel-firsters and they then went on to cunningly formulate this neocon ideology which conveniently justifies intervention in the Middle East in a manner that benefits Israel but which hides this ulterior motive behind an even more cunningly constructed intellectually coherent set of ideas about liberal imperialism? Err, what do you think? Adbusters, meet Ockham's Razor.

    Steve Sailer, a writer not averse to controversial conclusions if he sees the evidence that way, cited some observations from a reader of his which undermines the 'Machiavellian' reading of the likes of Wolfowitz:

    "A lot of anti-war folks seem to think that Wolfowitz was itching for war to provide cover for Sharon. I think the opposite is true. I think Wolfowitz specifically has a species of white man's guilt about the Arabs. Remember, he advocated leaving Saddam in power after the first Gulf War, and watched Saddam butcher the Shiites and Kurds in the wake of that decision. He's never gotten over it. Moreover, remember that Wolfowitz is an advocate of a Palestinian state, and has been for some time, and opposes Israel's settlement policy. (The latter is a mainstream American position, but the former is a novelty, as the American foreign policy establishment has historically been very leery of Arafat, the PLO and the Palestinian cause generally, preferring to resolve matters through existing Arab states. It's only because Israel took a flier on Oslo that America shifted position and resigned itself to a Palestinian state.) In any event, Wolfowitz feels guilty about Arab suffering, guilty about American complicity in Arab dictatorship, guilty about Israel's suppression of the Palestinians. He needed America to be a liberator of the Arabs because that is the only way he can assuage his guilt. He's not serving Israel's interests, but I do think he's blinded by his own. What I guess I'm saying is that he's sincerely self-deluded.

    "But be that as it may, Wolfowitz didn't author the war with Iraq, and Cheney, Rumsfeld and Bush didn't go to war for Israel. What I think can be said is that they underestimated the costs of war because of the efforts of Wolfowitz and that crew, but they realize that now and for that reason I think they are being pushed aside by their bosses, and folks like James Baker are being brought back into the picture."

    Again, what makes people like Wolfowitz so dangerous is that they are so sincere! His being Jewish has little to do with this except in a very marginal way.

    Here's an alternative explanation for the disproportionate number of Jewish people in the neocon movement -
    Jews are for various cultural reasons related primarily to their religious tradition (remember that joke about how a Rabbi answers a question? with another question) filtering down into attitudes about academic achievement disproportionately represented among intellectuals and academics. They aretherefore likely to be disproportionately represented among the leaders of almost all intellectual movements that are not inherently anti-semitic. Thus the disproportionate representation of Jews in the Communist movement (also a past cause of their scapegoating), thus the disproportionate representation of Jews in the libertarian movement (Milton and David Friedman, Ludwig von Mises, Ayn Rand, Robert Nozick, Murray Rothbard - all Jews. Is libertarianism a Jewish conspiracy too? How does it serve Israel?), in various left of centre movements (including the antiwar movement), among leading economists and policymakers - thus their representation among neocons. That's all there is to it - no conspiracy to take over the world for Israel's interests

    Thus, the Adbusters piece falls down on the basis of Ockham's razor but more than that, its critique of the necons is ultimately even less powerful than what it could have been if it dropped the silly conspiracy theory and focused on the substance of neocon arguments - in other words, for a good critique of neocons it is better to read Owen Harries than Adbusters. But I suppose you already knew that. Of course, my beloved is Jewish so feel free to ignore what I say - I may well be part of the ZOG conspiracy myself.
    Community Groups, Churches - Fight for less censorship

    In news from across the ditch, a censorship decision by New Zealand’s film classification office has church groups and the “Society for the Promotion of Community Standards” outraged. Normally this wouldn’t really be that newsworthy. After all – church and ‘community’ groups are always calling for more censorship and tighter restrictions on what the public can see, hear, read and download.

    But what makes this case so amusing is their outrage is over a decision by New Zealand censors to give the film ‘The Passion of Christ’ an R16 rating, (Article 1, Article 2) effectively banning children under 16 from viewing the film.

    It’s a beautiful irony that groups that have spent so much of their time pushing for tighter censorship have now been forced to argue against it. Can’t wait for it to happen here.
    Labor luvvies

    The Age hardly needed to add at the bottom of this fawning piece on Mark Latham that author "Rachel Ward is an actor". Other people might think things like this (though, frankly, I doubt it), but only the luvvies can get such political effusions into print. It's the price we pay for their celebrity - though Ward is probably better known for being married to Bryan Brown than anything she's done herself.

    Blog readers with memories of the now distant Keating era may recall Jacki Weaver's outburst at Labor's 1996 arts launch, telling Keating that "you don't know how much you are loved". What the subsequent election result showed was that he didn't know how much he was hated.

    Where Labor leaders are concerned the luvvies engage in far too much of the practice that Mark Latham once attributed to the PM and George Bush (I won't repeat the word on this G-rated blog).

    They should stick to scripts written by other people.
    More on the FTA
    My employer Henry Ergas had a piece in the Financial Review yesterday on the FTA and its implications for patent law and future responsibilities of the ACCC. Money quote:

    Ironically, while Australia is being obliged to adopt IP laws that can disproportionately favour producer interests, US policy-makers have taken a more critical stance on their IP laws. Late last year, the US Federal Trade Commission (the US counterpart to the ACCC) released a report on the proper balance between competition and patent laws.

    The FTC report, which follows a three-year investigation, highlighted the anti-competitive effects of two emerging problems in the US, namely the granting of excessively broad patents, that is, those that cover an excessively wide range of follow-on activities, and the granting of too many trivial patents.

    As the FTC showed, these misapplications of patent law can have an adverse effect on innovation, especially in those areas where innovation tends to be cumulative (in that each generation of innovations builds on the one before).

    Such problems could be materially greater in Australia given our status as a large net importer of IP. The overall effect of stronger IP protection is that Australian users will end up paying more in licence fees to US producers. It could also raise the costs of Australian R&D efforts, which need to build on previous innovations. Far from promoting innovation, the impact could be to chill it.

    If these effects are to be avoided, the ACCC will need to be more active in monitoring potentially anti-competitive uses of IP. The ACCC's IP guidelines, which are expected to be published soon, will be an important step in this regard ...

    Monday, February 23, 2004
    My alternative top ten 'Every undergraduate must read' books - restricted to non-fiction works

    This list is my alternative to this. Yes, I have to admit I've cheated by restricting it to non-fiction works and I've tried to select the most accessible representatives of fields of knowledge I regard as important.

    1) The blind watchmaker by Richard Dawkins
    2) Human, all too human by Friedrich Nietzsche
    3) Godel, Escher and Bach: An eternal golden braid by Douglas Hofstadter
    4) The constitution of liberty by Friedrich Hayek
    5) Individualism and economic order by Friedrich Hayek - just for the essays 'Economics and knowledge', 'The use of knowledge in society', 'Individualism - true and false' and 'Free enterprise and competitive order')
    6) Principles of economics by Alfred Marshall
    7) The evolution of physics by Albert Einstein and Leopold Infeld
    8) The Penguin essays of George Orwell
    9) The origins of totalitarianism by Hannah Arendt
    10) Conjectures and refutations: The growth of scientific knowledge by Karl Popper

    Update: Randall Parker has some spot-on comments on not just the original university presidents' list of 'must read' books but on education curriculla in general:

    What an incredibly deficient list. The longer list is not much better and completely misses the bulk of what science is telling us about human nature, life forms in general, and the physical laws of the universe. A person can not be truly educated if that person does not understand:

    The scientific method.
    Evolution by natural selection.
    Some basic physics.

    Evolution of species by natural selection is obviously the most important idea to come along in the last couple hundred years...

    What does it tell us about university presidents that many of them cited Karl Marx and not a single one cited Charles Darwin? Marxism is not a useful set of ideas for thinking about the world. Yet natural selection obviously is. At least the university presidents didn't mention some other discredited modern era frauds such as Sigmund Freud and Margaret Mead.

    The inclusion of Stephen Hawking's A Brief History Of Time for a science book is a poor choice since it is not going to teach the reader how to think scientifically or to be able to better understand science ...

    Colleges and universities do a poor job of training young minds. They are very costly, inefficient, and do not require their students to learn basic topics which are essential for making sense of the world.
    Tax and spend

    An opinion poll published in The Australian this morning highlights the complex politics of taxing and spending.

    50% of voters think that the top tax rate of 47% (really 48.5%, with the Medicare levy) is too high, including 38% of those earning less than $30,000, the principal beneficiaries of high tax rates on the middle class. But when the pollsters asked about what should be done with the surplus, a tiny 9% said it should be spent all or mainly on tax cuts. Most of the rest went for spending on health and education.

    That voters want contradictory things is hardly news. The trick for politicians is trying to work out their real trade-off preference. Regrettably for those of us who think that governments usually spend money badly, that preference has almost certainly been shifting in favour of public sector spending. There is a long series of polls going back to 1969 asking an abstract question about whether the respondent would like lower taxes or more spending on social services. Except for the 1969 poll, lower taxes has always been the most popular response, but it is now a plurality rather than a majority, with the trend going against lower tax. Consistent with this, tax has almost vanished as a top three issue in the Morgan Poll. In 1987 it was a top three issue for 27% of voters, compared to 8% in 2003. By contrast, health was 8% in 1987 and a whopping 62% in 2003.

    I think we can say that small tax cuts probably won't be a big winner politically. So long as most people feel trapped into relying on government services they'll probably support more spending, even though politicians have been pouring cash into health, and to a lesser extent education, with little obvious increase in satistfaction with these services. The tax cuts need to be big enough that people can afford to buy their own health and education services privately. The huge political difficulties in managing the transition between these two states of affairs, with simultaneous large tax cuts and reductions in spending, help explain why attempts to reduce the tax take have consistently failed to produce any sustained reduction in the tax burden.
    Must-read books
    Marginal Revolution points to the following results of a survey of university presidents of what ten books an undergraduate should read:

    1. The Bible
    2. The Odyssey
    3. The Republic
    4. Democracy in America
    5. The Iliad
    6. Hamlet
    7. (tie) Wealth of Nations, The Koran, The Prince
    10. (tie) Federalist Papers, Don Quixote, On Liberty, Invisible Man, King Lear, War and Peace, Moby Dick, The Lexus and the Olive Tree

    I think these are absolutely pathetic and cliched choices. Firstly I agree with Marginal Revolution that Tom Friedman is undeservedly finding himself in pretty august company here - there are much better books on international economics and globalisation around than The Lexus and the Olive Tree. Secondly, not a single book on science is on that list yet there are a series of absolutely uninspiring yawners on that list - I'm referring here to The Bible, The Koran, The Odyssey and The Iliad. I've gone through life without reading any of those long-winded fairy tales without a trace of regret. Sure, the Bible has been the originator of many common phrases in the English language but these can be easily picked up by reading much of the more interesting literary fiction of today without trawling through umpteenth pages of 'X begat Y'. I'll try and compile my preferred list later on but suggestions are open from readers.

    Sunday, February 22, 2004
    Greenhouse skepticism at the Australian Skeptics
    On Saturday night, I attended my first Australian Skeptics dinner with my girlfriend, who has been a member of that worthy organisation for a long time. The event was held at the Chatswood Club and geology professor Ian Plimer was the special guest. As long time readers will know, I've been annoyingly non-commital and agnostic on the greenhouse effect issue because I confess ignorance in my acquaintance with the relevant literature. As a sign of how out of the loop I was on the issue, I'd only heard of Ian Plimer in the context of his legal battles with Australian creationists. Thus I was surprised when it turned out that the subject of his dinner talk was on the Greenhouse effect and that he expressed a 'Greenhouse skeptic' viewpoint. The Skeptics audience gave his talk a respectful hearing and it seemed very well receieved though there were some (civil) challengers at question time. The inimitable Barry Williams, the public face of the Australian Skeptics, seemed to give a strong endorsement of his argument.
    The text of his talk is not available online at the Skeptics website yet. However I did a bit of Googling and found a paper he wrote for the IPA that his dinner talk was probably based on - it is available here. I also found an interminable Ken Parish vs John Quiggin gabfest which also discusses Plimer's IPA lecture.
    Now, before my left-leaning readers turn their eyes away, I'd again emphasise the need for an open (albeit critical) mind.
    Here are some comments and observations I have on his talk:
    1) I thought that some of Professor Plimer's claims were rather overstated - for instance, he accused the proponents of the greenhouse effect theory of being ideologically motivated. No doubt some are but two can play at that game and it is better to assume good faith on the part of one's opponents where the issue is resolvable on scientific and empirical grounds as should eventually be in the long run. The same lesson should apply to detractors of Professor Plimer's. Plimer is a respected scientist and science writer and his greenhouse scepticism seems to be the only thing he has in common with whatever other groups are promoting the greenhouse scepticism viewpoint. Interestingly, Plimer characterised environmentalists as the equivalent of creationists - interesting because .John Quiggin has implicitly used the same label to tag greenhouse sceptics - and Plimer has done a lot to undermine Creationism in Australia. The lesson? Such rhetoric is unhelpful on both sides. (Incidentally, my girlfriend, who is both an ardent environmentalist and ardent Skeptic, listened with interest and curiosity to his speech notwithstanding that rhetorical slight.)
    2) The gist of Plimer's paper is to cast doubt on the significance of the human contribution to the production of greenhouse gases. All sensible enough. I found the science in his talk provoking and fascinating as was his paradigm of the 'dynamic planet'. Regardless of the policy implications, the science behind his talk was very enlightening as was his claim that earth scientists and atmospheric scientists didn't see eye to eye on the greenhouse issue because of the longer term perspective of the firsrt profession. I'd be interested to hear comments from readers on this claim - firstly is it true? But I think his conclusion that therefore there is no point in addressing and exploring the issue of whether the carbon dioxide emissions from human activity can be reduced in an economically rational way to address possible externalities of such emissions to be unwarranted. Quite aside from the fact of whether global warming exists, it makes sense to develop institutions to more fully internalise the externalities of industrial activity. What form these institutions should take is yet another question.

    Also useful as a primer on the debate is this Lateline hosted debate between Plimer and the chairman of the UN intergovernmental panel on climate change. The exchange summarises the gist of the difference between Plimer's viewpoint and those of the atmospheric scientists.

    TONY JONES: Well, let me interrupt you there, do you accept that industrial pollution is playing any significant role in the greenhouse effect?

    IAN PLIMER: No, I argue that industrial pollution provides some very complex chemicals into the waterways and into the oceans if we are referring to the main industrial gas that is water, the second main industrial gas is carbon dioxide.

    The atmospheric carbon dioxide content has been changing enormously both up and down and we've only got to have one burp from a volcano and we've totally changed the atmospheric composition.

    It has happened before, it'll happen again. We had one of those burps in August 1986.

    That burp killed 1,700 people in Cameroon, filled valleys with carbon dioxide.

    We're current living in a period where it's fairly quiet with volcanos and fairly quiet with earthquakes.

    We've only got to go back thousands of years and we can see that times were very much different.

    It looks as if carbon dioxide actually follows climate change rather than drives it.

    TONY JONES: I'm going to interrupt you there, because I see Bob Watson shaking his head through most of what you were saying.

    Bob Watson, what do you think of what you heard?

    ROBERT WATSON: No, the scientists of IPCC have clearly looked at the historical record.

    We've looked at the last 440,000 years to try and explain how we've gone from glacial to interglacial periods and if you use that record, yes, it may be stimulated by changes in orbital eccentricities of the earth, but the only way you can explain going in and out of the glacial period is by looking at what happens to carbon dioxide and methane.

    You can actually calibrate the greenhouse effect using the very record that Dr Plimer's talked about and indeed we get a climate sensitivity that's very consistent with our current models.

    We've looked at the last 440,000 years. We've actually gone back several million years, basically. The thing of a single volcano is absolutely absurd.

    Yes, you can kill people when it sits in valley floors, but none of these large volcanic eruptions that we've seen in the last several thousand years have had even a blip on the carbon dioxide record of the Earth.

    So we've looked at the long record, we know that carbon dioxide is due to human activities.

    We also know it must change the radiative balance. Yes, there are some uncertainties in exactly, quantitatively, how will temperature and precipitation respond, but the basic greenhouse effect is well defined.

    Even some of the great sceptics in America will agree that human activities are having some effect.

    The question is they believe it's much less than what we and IPCC state.

    Is it ever right to breach the rule of law?

    The Prime Minister has ruled out retrospective laws designed to bring David Hicks and Mamdouh Habib to trial in Australia. Normally I would commend this adherence to a basic principle of the rule of law. In this situation, however, a retrospective law could be the less unsatisfactory of two unsatisfactory options.

    The alternative to the two being tried in Australia seems to be in Hicks' case a trial that his US military defence lawyer says can't be seen to be fair, and Habib not even getting that far toward a review of his case. Both men look like having a long stay in Cuba. Though I doubt any substantive injustice is being done here, their detention without proper trial is a long way from how things are ideally done in liberal democracies. So perhaps a trial, even if based on a retrospective law, would be better than nothing, and even it did not clear the two men it would at least bring them back closer to their families (for their sake, even if we don't much care about Hicks or Habib).

    The retrospective law would presumably be a version of Section 101.2 of the Security Legislation Amendment (Terrorism) Act, which prohibits giving or receiving training in terrorism.

    It could also be argued that a retrospective law of this kind would not be as bad as some other retrospective laws - including those against bottom of the harbour tax schemes that the PM thinks are OK. Even if training for terrorism was not strictly illegal prior to the passing of the terrorism legislation, such training is a preliminary to acts which are illegal in Australia, and just about every other jurisdiction around the world. People planning to kill and maim are much worse than tax cheats. It would be hard for anyone to portray the accused in such trials are moral martyrs simply because the law was retrospective.

    Unfortunately, moral martyrs are what we risk turning Hicks and Habib into by leaving them in this legal limbo. I'm not going to waste any sympathy on either of them, but we need better ideas about what to do with them than have so far been offered by either the US or Australian governments.
    Pricing Water

    Sydney is set for even tighter controls over the use of water, according to the SMH. The new proposals are likely to include restrictions on filling swimming pools, turning off public and private fountains and limiting the times and duration of hand held watering of gardens.

    Stage 1 restrictions have been in place since last October, and the government has been pleading with the public to conserve water. Yet there seems to have been very few people willing to come forward and suggest one of the more obvious (in my view) solutions - increasing the price of water.

    My feeling is that raising the price of water is unpopular because there is an assumption this will “hurt” poor families more than the well to do. Yet a look at the data from Sydney Water suggests that the suburbs that are the heaviest users of water are some of the wealthiest.

    Figures released by Sydney Water show the municipalities of Woollahra, Ku-ring-gai, Hunters Hill and Baulkham Hills are the most prolific water users in Sydney.

    The average annual consumption for a single dwelling in Woollahra of 409,000 litres puts it at the top of the list of water users for the third year in a row.

    Following closely are Ku-ring-gai (402,000 litres p.a.), Hunters Hill (401,000 litres p.a.) and Baulkham Hills (399,000 litres p.a.).

    The largest portion of this consumption is outdoors with over 25 per cent used on gardens, swimming pools and washing cars.
    “ - Sydney Water

    For reference, the average household uses 300 000 litres per annum.

    A sensible proposal might thus be that the marginal price of water increases as consumption rises past the 300 kilolitre average. The benefits of this approach would be

    • more revenue to Sydney Water with which to fix its leaking pipes and invest in new water saving or water reclamation technology,
    • 48% of Sydney households wouldn’t pay any more than they do today,
    • householders have the choice – either pay more for their water or cut back their consumption to avoid paying more.

    The most significant flaw in this that I can see is that households with more persons are at a relative disadvantage. This is because households with fewer persons will be able to enjoy a higher per person water usage before reaching the 300 kilolitre point at which higher priced water kicks in. However this really is no different to today’s situation where a household with more persons but the same per person usage, ceteris paribus, will use more water and pay more.

    Comments are welcome…




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