Here’s something I only noticed while writing a short piece for INTHEBLACK magazine: the rise of globalisation is not only slowing down almost to a halt, but in some places (like the Netherlands) may have been slowing down since around the turn of the century. That’s well before the global financial crisis and indeed before the global economic boom of the early 2000s.
It’s obviously very hard to measure globalisation; we don’t even have a clearly accepted definition of the phenomenon. The best measure may come from the KOF Swiss Economics Institute, which tries to incorporate social, economic and political data. The figures in the graph below come from there.
What’s going on here? I really don’t know, and expert commentary seems to be thin on the ground. A few observers have suggested a post-GFC increase in trade protection, but that doesn’t fit the timing shown in the KOF data – and anyway, the post-GFC protectionist surge hasn’t really happened.
Feel free to read the more detailed piece at INTHEBLACK.com, and make suggestions (and/or point to relevant research) in the comments section below.
The globalisation slowdown began as early as the start of this century
Someone sent me this article by Keynes celebrating the Arts Council in the Listener shortly after World War II had been won in Europe.
A world away, and worth a read.
I followed a link on the site of a complexity theorist I know to this story by Ben Allen on this interesting site (which is mostly about complexity theory). Anyway, this story is not about complexity theory. It’s about innocently dropping some kids off in a black neighbourhood and ending up with a gun to your head.
I’m writing this because the horrific news out of Ferguson, Missouri—the killing of an unarmed man and the subsequent assault on the populace and media—has been bringing back memories an experience I had with the police ten years ago in Chicago.
I should be clear about why I’m choosing to share this. It’s not because I think my own problems are particularly deserving of attention in comparison to the violence done to Michael Brown, Eric Garner, and other recent victims of police violence. In fact, what I experienced was relatively tame in comparison. But that’s kind of the point. This incident instantly brought my white privilege into sharp focus, in a way that has stuck with me ever since. Issues like racial profiling can be somewhat abstract for white people. I hope my story can open a new entry point into these issues for those who rarely experience them directly. Continue reading
Everyone is charging into print on the smoking ruin that the Europeans will be leaving Greece after the latest barely believable debacle in which the newly elected government Syriza, after receiving the overwhelming support of its electorate to reject the punitive terms of the payday lending it was being offered went back to Brussels and asked where to sign.
Jeff Sachs makes a good case that the root cause of the problem is insufficiently inclusive institutions. He offers the excellent analogy with the American Articles of Confederation: Continue reading
Intriguingly there are two substantial permanent monuments to Magna Carta at Runnymede. Both are American. This one was erected by the US Bar Association in 1957.
I was recently asked to participate in a panel discussion on Magna Carta and our democracy by the Australian Archives. The discussion will be replayed on Big Ideas on Radio National this coming Monday 20th July (now here), but you can watch the proceedings here if you’re especially keen. In the meantime, mostly over the fold below here’s a blog post I did in preparation for the event. It’s on the NAA website here. I have also drafted an additional one with some specific suggestions above and beyond a People’s Chamber, which I’ll post in the not to distant future.
It was an enjoyable process (though I was half inside a cupboard so lavishly spaced are the hotels of leafy London.) The panel was dominated by lawyers, the most eloquent of which I thought was Gillian Triggs, but over the course of the discussion, it dawned on me how much they were gravitating towards solutions that would be imposed by lawyers – all very well paid for their time I hasten to add, though that’s not the main point which is that they are an elite – indeed an elite elite. I think we need to do better than that. You can hear two different approaches to doing a bit better than that. More participatory approaches – championed by Pia Waugh particularly, and more deliberative ones championed by me.
(Apropos of nothing much, Magna Carta had standards in it – weights and measures for wine and other things – just as Hammurabi’s code did. You just can’t keep those emergent public goods from emerging and then attaching themselves to governments to improve their situation.)
If we compare our own system of government to King John’s government – either before or after Magna Carta – there is no comparison. We have a robust democracy rather than a tyranny at the very beginning of a centuries long process by which the West came to impose the rule of law on its rulers. In contrast to the barons of thirteenth century England, if we’re unhappy with our government, we vote them out.
Yet all is not well in our democracy. Continue reading
When I hear very serious people talk about confidence I often smell a rat. It’s such an amorphous thing and impossible to observe directly. Clearly there are times when it matters a lot, but I suspect it matters most at points of extremity, not most of the time. We’ve had the RBA talking a lot about the need for confidence to return to stimulate investment. But an awful lot of businesses invest more when they see demand outstripping supply and not before.
Anyway, here’s an abstract that’s worth noting in that regard, though it looks at confidence in another area. Often you hear pundits claiming that confidence is affected by punters’ opinions of how the government is going. Unless the effect is pretty strong – ie you might be spooked by really bad government – I find this dubious. And the evidence – or at least this evidence – suggests likewise.
Government Economic Policy, Sentiments, and Consumption
by Atif Mian, Amir Sufi, Nasim Khoshkhou – #21316 (EFG ME PE POL)
We examine how consumption responds to changes in sentiment regarding
government economic policy using cross-sectional variation across
counties in the ideological predisposition of constituents. When the
incumbent party loses a presidential election, individuals in
counties more ideologically predisposed toward the losing party
experience a dramatic and discontinuous relative decrease in optimism
on government economic policy. Using the interaction of constituent
ideology in a county with election timing as an instrument, we
estimate the impact of government policy sentiment shocks on consumer
spending, and we find a very small effect that cannot be
statistically distinguished from zero. The small magnitude of the
effect is estimated precisely. For example, we can reject the
hypothesis that pessimism regarding government economic policy
effectiveness during the Great Recession had as large an effect on
consumption as the negative shock to household net worth coming from
the collapse in house prices.
The Iranian Revolution of the late 1970s meant a huge shift in Middle-East politics and the relation between Islam and the rest. Within a period of just a few months, the ancient civilisation of Persia went from a strong ally of the West, to a committed enemy of Western interests. In the next 35 years, the US became the Great Satan; fatwas were pronounced on Salman Rushdie; and Iran got involved in conflicts from Afghanistan to Lebanon. In reaction, Iran was isolated and economically crippled with sanctions.
Now there is an accord between all the 5 permanent UN security members on the one hand and Iran on the other hand. It is thus not merely the US, but also Russia, China, and Europe that has wanted this deal, which involves a lifting of economic sanctions in return for UN inspectors going to suspected nuclear weapons production sites and Iran getting rid of its stock of enriched uranium.
Looking beyond the nuclear issue, this re-alignment with Shi’ite Iran makes perfect geo-political sense. The non-Muslim world, including Russia and China, finds itself in conflict with predominantly Sunni fanatics in a large number of countries. The Chinese authorities worry about their Muslim Uygur minority which is turning increasingly violent. The Russians are battling Muslim minorities in the Caucasus and in the South-East Siberian rim. France and the UK battle Muslim fanatics both at home, in Africa, in Afghanistan/Pakistan, and in the Middle East. The US pretty much fights Islamic militancy everywhere, cheered on by pretty much every non-Muslim power block.
‘The enemy of my enemy is my friend’, a well-known Arab saying goes, which makes Iran the natural ally of the whole of the non-Muslim world as Iran’s friends have come up against Sunni enemies too in recent years. Continue reading
The deal yesterday morning between the Greek PM and the Eurozone Finance ministers is an agreement to reform before talks. By tomorrow evening, the Greek parliament has to accept 4 pieces of legislation on a large range of issues (pensions, labour markets, taxation), after which the other 19 Eurozone countries will start negotiations on another bailout. The European Central Bank has refused any loosening of the conditions for more loans to banks, meaning that Greece will have to keep up its end of the deal whilst its banks are essentially bankrupt and the rest of the countries take their time to negotiate and decide whether they agree with the outcomes.
Any negotiated bailout will need unanimity to go ahead. So the Fins, whose government is dependent on the ‘Real Fins’ who are adamant that there will not be more money going to Greece, would have to agree. The Dutch liberal party PM, who brought a long list of broken Greek reforms to the attention of the Eurozone meeting (backed up by the Slovenians and others) would have to break an election promise not to send any more money to Greece. The German parliament, which is being inundated with stories of Greek corruption in the German press, would have to agree. The Baltic, Irish, and Portugese governments would also have to agree to more money for the Greeks, when the Greeks failed to push through the reforms that they did implement the last 6 years.
Forget it. Not gonna happen. Discussions on whether the reforms are useful or whether they would push Greece into another recession are beside the point: the outside money has dried up and Greece will have to live within its means whilst its government and its banks are bankrupt, so you should see the agreed-upon reforms as the first step of Greece outside the Eurozone. A tragedy for the population of Greece. Continue reading
Despite the fact that Federal Labor has consistently led in opinion polls over the last year or so by between four and six percentage points, most pundits (including the writer) have very little confidence that Labor will win the next election. In fact I expect they will more than likely lose.
Bill Shorten (assuming he survives as leader) is unlikely to win by continuing with his small target “me too” strategy where there isn’t a cigarette paper’s width between the policies of Labor and the Coalition on hot button issues like national security/terrorism and asylum seekers.
This article is based on the (admittedly courageous) proposition that a small target strategy is not the only way to win an election from opposition. It is possible to achieve government by winning people’s hearts and minds with an imaginative and popular positive policy platform, even though the last Opposition Leader who succeeded in doing so was Gough Whitlam in 1972. Of course I might be wrong, but here is my stab at an election policy manifesto that I reckon Shorten or his successor should adopt: