Sons of Liberty

Samuel Adams (played by British actor Ben Barnes) fights off redcoats in the History Channel miniseries “Sons of Liberty.” Photo: Ollie Upton / Ollie Upton / The History Channel / ONLINE_YESYes, folks flying high above the Pacific Ocean (which as Woody Allen’s father concedes to his mother is a worse ocean than the Atlantic Ocean) I took in the final episode of the History Chanel’s “Sons of Liberty” a mini-series about the American Revolution. I go for historical drama of any kind – even if it’s not very good, you can learn interesting stuff or look at interesting costumes. You can let your imagination run and wonder what life was like.

The production isn’t too bad. Acting was OK. It’s been panned for various reasons including its historical inaccuracy. It wasn’t excruciating by any means, but as you watched the boredom set in. And you started to notice details. The main detail was that the British were all bad. Bad as in “Mwaaahahaha” evil laugh bad. There was the odd obvious anachronism, as much of mood as of anything else. But then there was something so extraordinary that it made me wonder whether I was in fact hallucinating. Perhaps I was drifting off and imagined it. In any event, at least as remembered by me, as they were planning some plan one of the revolutionaries said to one of the others that a particular plan was “batshit crazy”.

I’ve always been intrigued by that expression. It’s stupid that it’s an expression. Why is it an expression? Still it’s kind of fun. I didn’t know that it was coined before 1776, which raises the question of why I’ve never run into it in the Wealth of Nations. But there you go. The very nattily attired George Washingmachine and the gang were wondering around Georgetown and Bunker Hill saying “Batshit crazy” – as in “We hold these truths to be self-evident and these falsities to be batshit crazy”.

Postscript: The place from which I hoisted the picture above picture (nice clobber ey?) confirms that I wasn’t hallucinating. And as I thought I remembered it was Ben Franklin that thought something was batshit crazy – always ahead of his time.

Theorising in science: theorising in economics

Robert Waldman has a fantastic critique of Paul Romer’s recent missives on economic science. He’s commenting ultimately on why Lucas’s work isn’t such a breakthrough. In it he highlights something of immense importance. It’s hard to think of many developments in economic theory in recent decades to which his observations do not apply. His point is that ‘advances’ in theory tend to be advances in conventions of professional practice, rather than new insights into the world.

General Relativity explained an anomaly … the precession of the perihelion of Mercury… predict[ed]… how much gravity caused light to curve… has yielded a huge number of predictions which fit the data exactly… was easily modified to correspond to an expanding universe…. Physicists are quite sure general relativity is not the truth (because it is inconsistent with quantum mechanics and therefore a lot of data). But it is a very empirically successful theory.

In contrast, the Dixit-Stiglitz example did not attempt to explain anomalies. … The aim was to make models with imperfect competition tractable… an example…. They made a modelling choice… neither would guess that people might actually have Dixit-Stiglitz preferences…. It meant there was a standard way to handle imperfect competition…. [But] there are no general results…. Together the assumptions of imperfect competition and Nash equilibrium imply almost nothing….[Dixit-Stiglitz] made it possible to have the illusion that economic theorists understood imperfect competition, but this was discovery by assuming we have a can opener. The example was fruitful because, once a lot of people decided to explore the same special case, they could discuss its interesting behavior…. Theory can grow if people agree on core assumptions. This is progress if the assumptions are useful approximations. Once a field of economic theory has developed, its core assumptions are no longer vulnerable to data. I do not think the the development of a new branch of theory is necessarily scientific progress. Continue reading

Abbott’s secret war on Australian workers

This is the second of two posts musing about Labor’s failure to deal with the full implications of the neoliberal revolution that the Hawke-Keating government unleashed from 1985.  That revolution was significantly easier for the Coalition to embrace, because extreme classical liberal ideology was already a part of its policy gene pool.

For Labor, however, neoliberal policies were almost wholly antithetical to the party’s history, culture and raison d’etre.  Although Paul Kelly’s conception of the Australian Settlement is a bit simplistic, it provides a useful framework to understand the extent of the shock to Labor values.  The White Australia Policy had already been swept away in the 1960s and replaced by multiculturalism by the Whitlam government.  But the aftermath of the Arab oil shocks and the collapse of Bretton Woods convinced Hawke and Keating, no doubt under heavy tutelage from Treasury and Finance bureaucrats, to jettison the other two major pillars of the Australian Settlement: tariff protectionism and completely centralised wage fixing by way of arbitrated awards.

It was argued at the time that Australian wages and conditions had been featherbedded by protectionism and the arbitration system, we had become internationally uncompetitive and would soon become a “banana republic” or the poor white trash of Asia if radical action wasn’t taken.  Deregulation, especially of the labour market, was the answer.  I remember (but can’t now find the quote) someone from the newly formed HR Nicholls Society commenting that their aim at least was to restore competitiveness by engineering a situation where every worker would be motivated because they would come to work every day afraid they might lose their jobs unless they toed the line.

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Unions, neoliberalism and the royal commission

The furore of the last few days over the Trade Union Royal Commission and revelations about serious and illegal underpayment of workers (especially foreign students) by 7-Eleven, Australia Post and others have brought into sharp focus a wider political question.  This article deals with the first of them, and I’m aiming to write a post about the second over the weekend.

It is increasingly clear that neither the political nor industrial wings of the Labor movement have come to terms with the full implications of the neoliberal revolution that Bob Hawke and Paul Keating embraced and set in motion from 1985 onwards.  Labor is far more interested in discrediting Royal Commssioner Dyson Heydon at just about any cost than in confronting the evident systemic problems that its hearings have revealed.

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The Impact of R&D Subsidy on Innovation

The Impact of R&D Subsidy on Innovation: a Study of New Zealand Firms by Adam B. Jaffe, Trinh Le – #21479 (PR)


This paper examines the impact of government assistance through R&D grants on innovation output for firms in New Zealand. Using a large database that links administrative and tax data with survey data, we are able to control for large number of firm characteristics and thus minimise selection bias. We find that receipt of an R&D grant significantly increases the probability that a firm in the manufacturing and service sectors applies for a patent during 2005–2009, but no positive impact is found on the probability of applying for a trademark. Using only firms that participated in the Business Operation Survey, we find that receiving a grant almost doubles the probability that a firm introduces new goods and services to the world while its effects on process innovation and any product innovation are relatively much weaker. Moreover, there is little evidence that grant receipt has differential effects between small to medium (<50 employees) and larger firms. These findings are broadly in line with recent international evidence from Japan, Canada and Italy which found positive impacts of public R&D subsidy on patenting activity and the introduction of new products.


Gotcha Journalism as bullshit: Propaganda v anti-propaganda

[O]ne does not go about identifying the weaknesses of what another person says in order to prove that one is always right, but one seeks instead as far as possible to strengthen the other’s viewpoint so that what the other person has to say becomes illuminating. Such an attitude seems essential to me for any understanding at all to come about. This is nothing more than an observation. It has nothing to do with an ‘appeal’ and nothing at all to do with ethics. Even immoral beings try to understand one another.   Hans Georg Gadamer

As I was driving to the airport on Thursday night I listened to this exquisitely ghastly specimen of the emptiness of modern political life. Patricia Karvelas is interviewing Assistant Minister for Education and Training Simon Birmingham. It’s a contest not a conversation – which is fairly par for the course.

But it’s an unusual kind of contest. Because Karvelas sees it as her role to disrupt the Assistant Minister in whatever way she can. Constant interruptions are par for the course. She begins by asking him a question which, according to the rules of political combat the Minister can’t answer straightforwardly. In announcing some help for manufacturing industry in Geelong and elsewhere ”Is the coalition just trying to sandbag” seats where it’s become now “desperately vulnerable”.

So here’s a situation where the Government spokesman has come on to talk about how good his policy is. You’d expect a hostile interview to be one in which the spokesperson’s case that it’s a good policy might be challenged. But instead the interviewer takes the interview in directions that the spokesman, as a spokesman, is unable to go in any bona fide way without being seen by all and sundry (including the media) as doing his job badly. Continue reading