Wednesday, June 30, 2010

In defence of (econ) blogging

This is an extension of comments I made here, here and here.

A Richmond Fed economist, Kartik Athreya, thinks bloggers in general should shut up about economics because economics is very hard, so very hard to do properly. The essay has provoked a lot of responses.

A thorough response here, an even more forensic response here, a brutal response here, a nuanced response here, a considered response here, a response on the virtue of extra information here, a re-awakening intellectual joy response here, a benefits-for-information (and limits to macroeconomics) response here, a pointed limits to macro-economics response here, a philosophical response here and a somewhat supportive response here.

That people responded, and often very thoughtfully, is hardly a sign that what they do as bloggers on matters economic has some insecure status, as suggested in the supportive response. Surely it simply shows they take credentialed offerings from the Fed system seriously?

Secondly, what is the significance of something being blogged? As I noted at Scott Sumner and Will Wilkinson's posts, a blog is just online self-published opinion pieces. Unless one has some great belief in the gate-keeping qualities of opinion page and magazine editors, it is no different than what economists have been doing in opinion pieces in newspapers, magazines and journals for lay audiences since, well, economics started. Should Malthus, Mill, Marshall, Keynes, Friedman, Hayek, Marx etc all have shut up and stayed in the professional journals? Athreya’s essay comes across as moral panic about a new technology mixed in with guild ("you have to be the right sort of person in the right sort of place") restrictionism.

For an example of the usefulness of econ blogging consider this short history lesson in macro-economics. Blogging makes this information available to far more people, far more easily.

I find online materials an enormously useful ocean of resources. Yes, you have to be discriminating, but that is true of any set of materials and information sources. That it so lacks gate-keeping restrictions can be a problem, but it is far more of an advantage. Blogging is only part of that ocean of resources, but to pick on blogging in general is a nonsense, an analytical failing of major proportions.

In the end, Athreya is complaining about an arena with low transactions costs and few limits to entry: a very odd thing for an economist to be complaining about. Usually, when people complain about low transaction costs and ease of entry, it is because they want to preserve some sort of privilege and/or sense of status. Which does seem to be what Athreya is actually about, at bottom.

(But I did enjoy the crack about Delong and Krugman's "we are obviously right" fiscal stimulus prescriptions:
... some who might know better. They are the patron saints of the “Macroeconomic Policy is Easy: Only Idiots Don’t Think So” movement: Paul Krugman and Brad Delong. Either of these men will assure their readers that it’s all really very simple (and may even be found in Keynes’ writings).
Perhaps Athreya could take up blogging ...)

UPDATE Scott Sumner makes one of those comments:
If you read Brad DeLong, you probably notice that he is a bit in awe of Krugman’s ability to be right about everything. Actually, Krugman isn’t right about everything, but he tends to be wrong about exactly the same things that DeLong is wrong about, and so DeLong wouldn’t notice those things.
Who said economics ain't fun?

Tuesday, June 29, 2010

Institutions matter

This extends a comment I made here.

A commenter asked econblogger Scott Sumner:
I am curious. What is your take on those who argue (typically Chomsky followers) that Jamaica, El Salvador, Nicaragua and even Haiti have established drastic neoliberal reforms – some even banning unions, strikes, and allowing children to work – yet their economy remains stagnant?
My response was that economic outcomes depends a great deal on basic institutional structures. According to Hernando de Soto’s The Mystery of Capital, it can take up to 19 years to complete the legal processes for land purchase in Haiti. That sort of regulatory quagmire, coupled with massively unstable and confiscatory politics, will keep any country poor. There is a reason Haitians who leave Haiti do much better economically than those who stay.

The same general point applies to other Latin American countries. They operate according to a “social mercantilism” of insiders and outsiders. Hernando de Soto’s grad students famously found it took 289 days and $1,281 (31 times the monthly minimum wage) to legally register a single-employee garment business in Lima, Peru. The same process in Miami would take maybe a day. It is not hard to see why Miami (a significantly Hispanic city, after all) would have a lot more economic transactions than Lima.

Why do Latin Americans come to the US? Because the US British-legacy institutional framework works so much better than the Iberian-legacy they grew up under, so they can make a lot more income by moving north. That sort of difference is simply not covered by one commenter’s definition of ‘neoliberalism’ as:
free capital flows, less regulation, privatization, and limits/elimination of import restrictions
particularly if the only regulation you are looking at is border regulation (capital flows and trade flows).

One also has to take size into consideration is looking at the effects of protectionism, for example. The US is such a large economy, that the level of protectionism or otherwise does not make much of a difference. But Australia has done far better in comparative performance since we liberalised trade (among other things) precisely because we are a relatively small economy.

Prior to adopting a highly protectionist structure in the early part of the C20th, we had a higher per capita income than the US (135% of US per capita GDP in 1890, prior to the 1890s Depression and long Federation drought: we still managed, upon recovery, to be 105% of US per capita GDP in 1910). Once we went protectionist, we lost ground comparatively: particularly in both World Wars and during the 1920s boom (down to 77% in 1931: we had a comparatively better 1930s Depression, from 1933 onwards getting back to rough parity). We recovered from a low of 59% of US per capita GDP in 1945 to 81% in 1949 but continued to tread water (to 75% in 1983) until we started liberalising.

Since we liberalised, we have managed to improve our proportion of per capita GDP compared to the US (up to 81% in 2008: all these figures taken from the late Angus Maddison’s time series). Though, the more telling indicator of improvement is that the Australian economy has become much better at dealing with economic shocks.

Regarding New Zealand outlier performance (high in economic freedom, not so high in per capita GDP), it suffers from isolation, smallness, an unfortunate economic legacy and unhelpful comparative advantage (farming products).

My examples of appalling levels of transactions costs prompted the following comment from Doc Merlin:
Someone was telling me that for a large project it was up to 6 years in California. I guess that explains why businesses are moving to Houston where it takes days. … included permits, fighting off the inevitable lawsuits, and getting permission for the building(s) in the 6 years for a large project in California. Just purchasing the land can happen in less than day.
To which I respond: let's hear it for the power of competitive jurisdictions!

After all, it largely explains why Europe took off and why Japan (where, under the Tokugawa shogunate, the daimyo could, in terms of economics and commerce, run their provinces pretty well how they liked) was the first non-Western country to follow.

Monday, June 28, 2010

Self-employment as economic shock absorber

This extends a comment I made here.

Almost one-fifth of the Australian workforce are in some form of self-employment. The table in the analysis linked to can be seen here. There are 975,000 other business operators plus 1,000,000 independent contractors (previously defined as 'own account workers' or 'owner-managers of unincorporated enterprises') for a total of 1,975,000 (18.5%) out of a workforce of 10.7m. Alternatively, that is about 28% of the private sector workforce.

Commenter Doc Merlin provided the US figures:
As of the last census, we had ~10M completely self employed people. Also roughly 20M firms have no payroll (these people are partially self employed). We have total employment of ~140M people.
This is roughly 7% “complete self employment.” The number of people with partial self employment is probably much, much larger.
The reason why I was interested is that, in a developed economy, high levels of self-employment reduces the effect of economic shocks (since lots of people can take a temporary income hit without losing their jobs), reflects the rise of two-income households (since fluctuations in income can be covered more easily) and the regulatory burden placed on permanent, full-time employment (which imposes costs in wasted resources or blocked opportunities that can be captured by moving to other forms of employment). In Australia, we have a long history of REALLY regulating permanent full-time employment, with some of the highest (and specific) minimum wages in the developed world: though we regulate less than we used to.

More generally, levels of self-employment in an economy tends to be negatively correlated with per capita income (via), as Tino Sanandaji notes in his post:
You get lots of self-employment when transaction costs are too high and the institutional quality low
In Australia, the transaction costs imposed by regulation on ordinary employment is the issue, rather than low institutional quality.

By contrast, I am sceptical about how much wage flexibility in ordinary employment is achievable. There are real contractual and trust issues with cutting base wages to do the same work, as I posted about here. To put it another way: even in a completely unregulated labour market, I suspect there would still be a lot of nominal downward stickiness.

Economist Scott Sumner agrees, responding to my original comment with:
I completely agree. I hope people didn’t infer that I thought wage stickiness was a “problem” that needed to be fixed. I think it is a characteristic of free markets, which must be taken into account when trying to set monetary policy. The ideal monetary policy is one that leads to a situation where most workers don’t need to cut their pay.
There are some government policies that make nominal wages a bit stickier (minimum wages, extended benefits) but I would change those policies for reasons that have nothing to do with business cycles.

ADDENDA For a critical, cross-country analysis of self-employment, see here (pdf) (also via).

Saturday, June 26, 2010

Paul Romer’s Charter Cities: not medieval enough

I am very much in favour of (intelligently) looking at the medieval period for insights into the modern age. Not merely because Western civilisation grew out of the Dark Age alliance of (mostly Germanic) warlords with the Christian Church—so the institutional origins of Western civilisation are far more medieval than Classical. But because some of the issues grappled with back then—how to create a stable-yet-adaptable institutional order, particularly in a post-imperial setting—are ones that large parts of the world are still grappling with.

As I pointed out in a recent post, even the surge in economic liberalising reforms in recent decades has revealing medieval precedents.

Probably the most dramatic suggested use of medieval precedents to deal with modern problems is economic Paul Romer’s notion of Charter cities, which he blogs about here. The notion is that foreign companies or corporations run an enclave with pro-economic activity rules: rules which will have credibility by not being run by the incumbent government and its political processes.

A recent piece in The Atlantic on Paul Romer and his Charter cities ideas provides the archetypal medieval example for this idea:
HALFWAY THROUGH THE 12TH CENTURY, and a long time before economists began pondering how to turn poor places into rich ones, the Germanic prince Henry the Lion set out to create a merchant’s mecca on the lawless Baltic coast. It was an ambitious project, a bit like trying to build a new Chicago in modern Congo or Iraq. Northern Germany was plagued by what today’s development gurus might delicately call a “bad-governance equilibrium,” its townships frequently sacked by Slavic marauders such as the formidable pirate Niclot the Obotrite. But Henry was not a mouse. He seized control of a fledgling town called Lübeck, had Niclot beheaded on the battlefield, and arranged for Lübeck to become the seat of a diocese. A grand rectangular market was laid out at the center of the town; all that was missing was the merchants.

To attract that missing ingredient to his city, Henry hit on an idea that has enjoyed a sort of comeback lately. He devised a charter for Lübeck, a set of “most honorable civic rights,” calculating that a city with light regulation and fair laws would attract investment easily. The stultifying feudal hierarchy was cast aside; an autonomous council of local burgesses would govern Lübeck. Onerous taxes and trade restrictions were ruled out; merchants who settled in Lübeck would be exempt from duties and customs throughout Henry the Lion’s lands, which stretched south as far as Bavaria. The residents of Lübeck were promised fair treatment before the law and an independent mint that would shelter them from confiscatory inflation. With this bill of rights in place, Henry dispatched messengers to Russia, Denmark, Norway, and Sweden. Merchants who liked the sound of his charter were invited to migrate to Lübeck.

The plan worked. Immigrants soon began arriving in force, and Lübeck became the leading entrepôt for the budding Baltic Sea trade route, which eventually extended as far west as London and Bruges and as far east as Novgorod, in Russia. Hundreds of oaken cogs—ships powered by a single square sail—entered Lübeck’s harbor every year, their hulls bursting with Flemish cloth, Russian fur, and German salt. In less than a century, Lübeck went from a backwater to the most populous and prosperous town in northern Europe. “In medieval urban history there is hardly another example of a success so sudden and so brilliant,” writes the historian Philippe Dollinger.

Perhaps the only thing more remarkable than Lübeck’s wealth was the influence of its charter. As trade routes lengthened, new cities mushroomed all along the Baltic shore, and rather than develop a legal code from scratch, the next wave of city fathers copied Lübeck’s charter, importing its political and economic liberties. The early imitators included the nearby cities of Rostock and Danzig, but the charter was eventually adopted as far afield as Riga and Tallinn, the capitals of modern Latvia and Estonia. The medieval world had stumbled upon a formula for creating order out of chaos and prosperity amid backwardness. Lübeck ultimately became the seat of the Hanseatic League, an economic alliance of 200 cities that lasted nearly half a millennium.
So, far so good.

Romer even has a dramatic modern example—Hong Kong:
WHEN ROMER EXPLAINS charter cities, he likes to invoke Hong Kong. For much of the 20th century, Hong Kong’s economy left mainland China’s in the dust, proving that enlightened rules can make a world of difference. By an accident of history, Hong Kong essentially had its own charter—a set of laws and institutions imposed by its British colonial overseers—and the charter served as a magnet for go-getters. At a time when much of East Asia was ruled by nationalist or Communist strongmen, Hong Kong’s colonial authorities put in place low taxes, minimal regulation, and legal protections for property rights and contracts; between 1913 and 1980, the city’s inflation-adjusted output per person jumped more than eightfold, making the average Hong Kong resident 10 times as rich as the average mainland Chinese, and about four-fifths as rich as the average Briton. Then, beginning around 1980, Hong Kong’s example inspired the mainland’s rulers to create copycat enclaves. Starting in Shenzhen City, adjacent to Hong Kong, and then curling west and north around the Pacific shore, China created a series of special economic zones that followed Hong Kong’s model. Pretty soon, one of history’s greatest export booms was under way, and between 1987 and 1998, an estimated 100 million Chinese rose above the $1-a-day income that defines abject poverty. The success of the special economic zones eventually drove China’s rulers to embrace the export-driven, pro-business model for the whole country. “In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” Romer observes drily.
The sticking point in Romer’s example, is not merely that it is neo-medieval, it is that it is neo-colonial:
Of course, versions of China’s special economic zones have existed elsewhere, especially in Asia. But Romer is not just arguing for enclaves; he is arguing for enclaves that are run by foreign governments. To Romer, the fact that Hong Kong was a colonial experiment, imposed upon a humiliated China by means of a treaty signed aboard a British warship, is not just an embarrassing detail. On the contrary, British rule was central to the city’s success in persuading capitalists of all stripes to flock to it.
Romer sees being foreign-run as being the solution to the credibility problem. But being foreign-run has an inherent insult problem that has scuppered attempts to put his idea into practice. As, for example, in Madagascar:
Even as Romer was meeting with Ravalomanana, the president’s main political opponent was sniping at the proposed lease of farmland to Daewoo, and the idea of giving up vast swaths of territory to foreigners was growing increasingly unpopular. The arrangement was denounced as treason, and public protests gathered momentum, eventually turning violent. In late January 2009, protesters tossed homemade grenades at radio and TV stations that Ravalomanana owned; looters ransacked his chain of supermarkets. In February, guards opened fire on marchers in front of the presidential palace, killing 28 civilians. At this, units of the army mutinied. Soon, Ravalomanana was forced out of office.
It also has the problem of why would Western governments (for example) embrace onerous obligations which are, however way you slice it up, neo-colonial.

Romer’s problem is that he is too hung-up on the example of Hong Kong on its own and not enough on either how it had its effect or the medieval examples. What made Hong Kong successful in the way Romer wants it to be—a widening example that economically transformed an entire country—was not Hong Kong, but that the People’s Republic copied it. British rule in Hong Kong may have been the starter, but it is not the element that made the example able to be repeated.

Nor was it what made the medieval examples work. Medieval charter cities were not examples of foreign rule but of entrenched local rule. There was no way a ruler such as Henry the Lion was going to let some foreign ruler run an enclave. But he was willing to guarantee prosperous locals (even if imported locals) that they could do so.

The notion that modern rulers, or modern electorates, are going to be anymore favourable to leased-out foreign rule is equally nonsense. Hong Kong was forced on Imperial China at gunboat-point. Romer is either being betrayed by a bias in favour of Westerners per se or by a liberal academic’s impatience with borders and particularist loyalties (or both) in not seeing how foreign rule will not work in the way he wants it to.

A structure of entrenched local rule (where ‘local’ includes free movement to the enclave) does not insult local politics, citizens or loyalties. On the contrary, it gives aspiring locals something to aim for and be part of. That was how medieval charter cities got much of their economic “zing”: by attracting formerly rural folk willing to have a go. Indeed—given that medieval cities had death rates higher than their birth rates—attracting such inflow was necessary to maintain population, let alone increase it.

Paul Romer needs to see the Hong Kong example fully—that only outside imposition made it happen in the first place, that repeatability sans foreign rule is what gave it transformative power—and go for the full medieval package of entrenched local rule. Harness particularist loyalty, not work against it.

What he needs is a modernised Lübeck Charter, creating lots of new Lübecks, not this self-frustrating, other-insulting pining for new Hong Kongs. Neo-medievalism for real, not bastardised by alienating and just-too-hard neo-colonialism.

Thursday, June 24, 2010

The polls must have been diabolical: the Pointy-haired Boss is no longer PM

Australia has its first female PM as Julia Gillard is elected unopposed to the Labor leadership:
Mr Rudd's sudden and spectacular downfall makes him the first Labor prime minister to be dumped from office before completing a first term.
This strikes me as an unambiguous improvement in good government. A friend whose brother is a senior public servant told me about a month ago that the senior bureaucrats were looking forward to the prospect of Julia replacing Kevin because, unlike Kevin, Julia listens.

Now, as it happens, Julia periodically says things I agree with while I just found Kevin irritating, but that is not the point. The problem with Kevin Rudd as PM was simple: he is a domineering control freak and you cannot be a successful PM of a modern democracy if you are a domineering control freak. You have to be able to listen, to consider because modern societies are just too complex for a single individual or narrow clique to understand the ramifications of actions and policies. In particular, you have to be able to listen and consider if you are going to be at all persuasive.

Take the proposed mining super profits tax. Former Hawke Government minister Peter Walsh correctly highlighted the failures in process behind the tax. It has been striking how unpopular the tax is: apparently on three grounds (1) those people reliant on the mining industry, (2) those people who have super invested in the mining industry—most people nowadays—and (3) feeling it is an offense against the same rules for everyone. Perhaps there was also the problem of confirming the view that "this guy does not listen/is lost in his own little world".

Rudd was a PM notoriously demanding of other people's time. One sign of the problems at the heart of the Rudd Government was the high turnover amongst its staffers. If you feel that only you can make decisions, but have a bureaucrat's demand for "facts" and paper, of course you are going to be frantically demanding of others.

A former federal Labor minister brutally analysed the Rudd Government in terms which fits with the problem of having a domineering control freak at its head:
The electoral timidity, the profligacy, the spin, the lack of reason, the internal bullying, the vast waste of money, the interminable photos with children, the transparent use of religion with the photos at church on Sunday, have all embittered his already unimpressed caucus colleagues.
Having wasted its first term, the Labor government must now remake itself in a way that suggests that it will not waste a second.
New Governments tend to have rocky first terms, as they learn how much harder Government is than Opposition. The Rudd Government also suffered from having followed a Government that had remained fundamentally competent. People may have got tired of John Howard: WorkChoices and housing issues may have alienated them, but the Howard Government was not brought down by issues about basic competence in management.

With the education stimulus scams and the home insulation disaster, an electorate who had got used to basic competence in Federal Government seems to have been unimpressed by the contrast. But both those failures went directly back to the failures inherent in Rudd's "management" (using the term loosely) style. Rudd could just about be used as a perfect exemplar of Dilbert's attack on managerialism.

Kevin Rudd was the Pointy-haired Boss as PM. Not a good look.
All this had become reflected in the opinion polls as people took stock. Now, it is perfectly true that it is normal for Oppositions to lead Governments in the opinion pols at this stage in the electoral cycle. That was not the problem, the problem was the direction of the movement in the polls.

The direction was against the incumbent Government, not towards it. Which is the reverse of how it should be at this stage in the electoral cycle. Kevin Rudd’s popularity slumped dramatically while Tony Abbott was doing fine, thank you. More reports of bad polling results for the Rudd Government. The polling gets worse. This is so the wrong time in the parliamentary cycle for an incumbent government for this to be happening.

The question now is: was the electorate unhappy at Federal Labor as such or just Kevin PM? My feeling is the latter much more than the former. The NSW State Labor Government is fairly clearly a Dead Government Walking, but there is a lot of powerful history there. We are talking about a Government that has had 169 ministerial changes since the 2007 election, has suffered scandal after scandal, was fairly clearly only re-elected last time because the electorate could not quite come at the Liberal Opposition and has just suffered a record-setting by-election swing against, the capping of a series of disastrous by-elections.

Yes, there were some nasty messages for federal Labor in the Penrith by-election wipeout. And the ALP does have a recent tradition of putting a woman in to "carry the can" when things are going bad: as with Carmen Lawrence, Joan Kirner, Kristina Kenneally.

But that is not the only way women get to be heads of Labor Governments: Anna Bligh being the obvious counter example.

So, is Julia Gillard a Carmen/Joann/Kristina or an Anna? That rests on whether the electorate's anger is centred on Kevin or on Federal Labor. My take is that it is much more Kevin than Labor as such. As long as the failures of the Rudd Government can be tagged to Kevin, then I think the Labor Party has to be (now) favoured to win the next Federal election.

Australian federal governments generally do get re-elected. That last one-term federal Government was the Scullin Government, and the onset of the Great Depression was going to be tough to survive. So Julia is surely to be favoured to be re-elected as Australia's first female PM.

Admittedly, Tony Abbott has proved to be a formidable Opposition leader. People have a sense of who Tony is and that clearly works for him. That the Fairfax media/Age/education establishment/academe/art-literary establishment/inner city Progressivist Ascendancy finds that bizarre just shows how much they do not get the perspective of the general public (which, given they define themselves against such is not all that surprising).

But, as long as Kevin's failings are not contagious, then I would bet on Labor being re-elected. So, the question becomes how many time-bombs are there in the policies Kevin set in train?

If I were Julia, I would be taking a very hard look at what Kevin-decided spending is currently in train. I would particularly be asking why the National Broadband Network is not just another home insulation, education stimulus disaster waiting to happen. Because the true disaster for Federal Labor would be for voters to decide all the things that they disliked about Kevin were not just Kevin after all.

$A43 billion dollars in public spending set in train by the Pointy-haired Boss PM. Can't you just feel the looming trainwreck?

UPDATE: Kevin, the now former PM, and his entourage acting like domineering control freaks over the proposed mining super-profit's tax. Kevin’s track record went back to his days in Queensland public life. Former Opposition leader and Foreign Minister Alexander Downer being brutally revealing about K.Rudd:
The point is clear: people at the embassy had died, we needed to get the Indonesians onto the case to establish who the culprits were, we had to show support to the embassy staff at this time of crisis. It wasn’t about me and it certainly wasn’t about the shadow minister for foreign affairs, Mr Kevin Rudd. But for the member for Griffith it was about one thing: himself. …
It has taken an incredible three years for the Australian public to realise who their national leader really is. I sat with a Labor luminary having a late-night drink in June 2008. He turned to me and said: ‘Mate, one day the Australian public will grow to hate Kevin Rudd as much as I do.’ That day has arrived.
An economist’s take on changes in Oz political leadership:
It is noteworthy that their handling of the ETS was decisive in the demise of both Kevin Rudd and Malcolm Turnbull. The cynicism and opportunism of the Rudd-Turnbull ETS was one of the most shameful episodes in the history of Australian federal politics. It is testimony to the remarkable efficiency of the Australian political system that it is capable of so swiftly liquidating its own errors.

Tuesday, June 22, 2010

Providing schooling

This expands a comment I made here.

The dominant purpose of providing schooling is to control belief formation (pdf). That is why the biggest competitors to the state in school provision are religious bodies.

Progressivists generally want to control belief formation as much as possible, which is why they tend to hate private provision and parental choice in schooling. That is the great political bargain: the teacher unions protect and expand the privileges of their members while organising for those "goodies" on the basis of a set of beliefs that channels networking: both within the unions and in their wider political coalition building. So the bargain is—we will promote a shared belief set and you will support our monopolising rorts. Student vouchers are SO not helpful to that.

When parents pay for schooling (either directly or by choosing where to live), one of their biggest issues is controlling who sits "next to" their child. That is, whether kids in the classroom will help or frustrate their child's learning. Hence private schools and universities provide scholarships. Hence also suburban voters not liking vouchers. You spend the premium to buy a house in a "good school" area and the government then pays to ghetto kids turn up: this was not what you were buying.

So vouchers conflict with the interests of teachers, progressive politics and suburban parents. The surprising thing is not that vouchers have encountered much resistance but that there are any voucher programs at all.

BTW The notion that provision of government schooling promotes equality or social mixing is bunkum. Government schooling stratifies by the catchment area and ability to work the political process. (As someone who teaches in lots of schools in Melbourne, private schools are at least as ethnically mixed as government schools, for example.) Indeed, one study found that private schools were more socially racially integrated than government schools.

My original comment prompted a responding comment from economist Scott Sumner:
In my town people are strongly opposed to religion in the public schools, but then allow the schools to go out and indoctrinate students in socialism, feminism and environmentalism. Just to be clear I think the schools should cover economics, gender, and the environment. But it would be nice to have more than one point of view.
Yes, quite, because it is all about controlling the socializing of belief. Those opposed to private schooling want to eliminate rival belief sets in education.

That the new UK Government is making it a lot easier to set up new schools is certainly a positive move. But there is still the deeper problem that, with government schooling, the main provider (government) is also the regulator, a massive and pervasive conflict of interest that afflicts both government and private schooling.

The claim is that government schooling is citizen controlled, which is largely nonsense. Private schooling gives parents more control, more effective say, which is why there is a surge in private schooling in some of the poorest regions of the world, where education opportunities matter most. Government schooling is like public sector activity generally, it is controlled by those who control the relevant attributes: officials and others in the public sector. Having the main provider also be the regulator makes that more so, not less.

If the head of a football club offered to take over the entire football code: set the rules, appoint the umpires while still competing in the code, people would treat the proposal with the derision it would deserve. But that is precisely the way most children are educated. What is obvious nonsense for a sporting code is no less nonsense for schooling. One might be tempted to say we care more about our sport than the schooling of our children, but it is more the case that “democratic accountability” is waved as a magic wand to boost confidence that Ministers for Education and Education bureaucrats are, somehow, magical and “rise above” the conflict of interest.

No, they don’t. Taking a good hard look at the perennial problems of government schooling shows that they don’t.

Saturday, June 19, 2010

Neoliberalism and laissez faire

Economist Scott Sumner makes the following distinction in the context of a discussion of the Heritage Foundation’s Economic Freedom index:
I prefer the term ‘laissez-faire’ for the small government model measured by Heritage (using all 10 categories) and ‘neoliberal’ for the model of free markets plus social insurance (such as Denmark.)
I do not much like the term 'neoliberal' but I approve of Sumner’s distinction between it and laissez faire, since what is called "neoliberalism" is best understood as economic liberalism in the context of welfare states (or otherwise significantly interventionist states). Indeed, liberalising reforms have often been undertaken by centre-left governments in developed welfare states precisely to make the welfare state more sustainable.

Sumner’s distinction picks up on a key point: the phenomenon labelled “neoliberalism” is a trend in economic policy, it is not an ideology. When even North Korea undertakes liberalizing reforms (albeit in sheer desperation) we can see that ideology is not the driving factor here.

If one is aware of wider economic history, then it makes even less sense to see “neoliberalism” as a form or manifestation of ideology. Liberalising reforms typically have three elements to them:
“De-regulation”, abolishing or loosening regulatory interventions in markets;
“Corporatisation”, turning government production units into firms; and
“Privatisation”, selling off government assets or otherwise transferring them to the private sector.
To put it another way, these reforms reduce transaction costs, redefine and reassign property rights and expand access to private funds for infrastructure development. Typically, they occur when the state is facing some sort of fiscal crisis.

If we look at them in that way, then reforms of such form go back in Western history at least to the medieval period. A medieval borough, for example, was an enterprise zone with its own governance structure.

They are a recurring pattern because the policy premium on economic efficiency goes up and down and they are all ways of increasing economic efficiency. Lowering transaction costs means there will be more transactions. Clearly defining property rights lowers transaction costs. Assigning property rights so they align with incentives encourages economic activity. Increasing the ability for private investment to profit from investing in and/or maintaining infrastructure increases the level and operation of infrastructure.

If the state is in some sort of fiscal crisis, then the policy premium on economic efficiency goes up, encouraging policy makers to look for ways of increasing it. With the expansion of Western welfare states in the 1960s (increasing obligations on the state) and the collapse in productivity growth in the early 1970s (decreasing underlying rates of economic growth), the stage was set for a wave of liberalizing economic reforms in Western countries.
Competitive jurisdictions also tend to put pressure on policy makers, either because capital and labour starts leaching away to friendlier jurisdictions or because the effective capacities of rival states increases, or both. (For example, the post-Deng reforms economic take-off of China--which produces lots of striking factoids, such as China now exports in six hours what it did in the whole of 1978--clearly put pressure on Indian policy makers not to accept the LSE/Hindu rate of growth and to start tackling the Permit Raj.)

Such reforms rest on treating public policy as something other than intentions + resources => outcomes. Those whose politics (indeed, often their sense of identity) rests on the conspicuous compassion of their intentions tend to resist such changes. Typically by attacking the alleged intentions of such policies. Often without bothering to do any serious research into what advocates of liberalizing reforms actually say or believe. Telling such people that “neoliberalism” in the Western democracies was about preserving the sustainability of welfare states is likely to get a very hostile reaction, since it deprives them of their sense of superior intentions (and the characterizing of those with different policy prescriptions as having patently “evil”, and thus inferior, intentions).

Yet it is clearly the case that keeping the welfare state sustainable was fundamental to the “policy coalitions” that supported liberalizing reforms. It is no accident that deregulation in the US got underway during the Carter Administration, that the Hawke and Lange governments in the Australia and New Zealand were liberalizing governments and that the first bout of liberalizing reforms in Australia was under the Whitlam Government.

The trend over recent decades to such liberalizing reforms, including specifically by centre-left governments, is part of the longer term trends in social democracy: which is for the liberal element to increase and the socialist element to decrease. Stage one was the adoption of liberal politics (i.e. parliamentarianism), creating the social democratic tradition. Stage two was the abandonment of further nationalization of productive enterprises. Stage three was de-regulation, corporatisation and privatization. (Which could be characterised as receiving new information about the efficiency of markets.) Stage four will be the abandonment of the nationalization of the household (i.e. substantive welfare reform).

But the tendency for economic liberalization extends well beyond the evolution of social democracy. Since incentives matter, aligning control of attributes with incentives encourages their more productive use and lowering transactions costs increases the number of transactions there will be more waves of such reforms whenever the policy premium on economic efficiency is high enough. Which is my basic difficulty with the term ‘neoliberal’: it takes the historical context out of events.

Thursday, June 17, 2010

The power of intuitive narrative

This is based on a comment I made here.

Statement A from monetary economist Scott Sumner:
This is why I love monetary economics. It is incredibly counter-intuitive.
Statement B from monetary economist Scott Sumner:
Do you notice that on these major issues the vast majority of mainstream economists were wrong at the time? And do you notice that they were wrong in a particular way? That they underestimated the role of money in driving NGDP shocks.
Conclusion: in times of stress, economists go with the intuitive narrative. For example, that monetary policy is not effective a zero interests rates so we need to go with fiscal stimulus, despite discouraging empirical evidence on the effectiveness of the latter. (Though tossing out the cases that did not fit is moving beyond simple going with the intuitive narrative.)

Wednesday, June 16, 2010

Agendas: queer and otherwise

This extends a comment I made here.

Regarding "the GLBT movement", it is always dubious to wander into talking of “the homosexual agenda". The phrase has two meanings:
(1) A desire by GLBTI (Gay, Lesbian, Bisexual, Transgender, Intersex) people not to be treated like crap, or otherwise as some failed version of "real" people.
(2) The queer-hating version of that old chestnut "the Jewish agenda" (see also "Jewish world conspiracy").
The second is an expression of how equality is an insult to bigots (that such patent "moral inferiors" could dare to claim to be the same as "real people") such that even perfectly ordinary claims become a manifestation of how sinister "these people" are.

All movements aspiring to equal treatment have two wings, with the credos of:
(1) Please can we treated be treated as legal equals, not some inferior form of the human.
(2) Any society that treats X group so badly is so corrupt that only root-and-branch transformation will suffice.
Group (2) make great scare targets (and carrying on about them a basis for continuing to justify exclusion), but it is group (1) which end up carrying the day. And when they do, it turns out that institutions that "needed" to be "defended" just adapt and life goes on.

Sunday, June 13, 2010

Integrating Islam

Islam has a simple logic to it. Allah is sovereign over the entire universe, and thus the entire globe. Islam, through his Prophet, is a lawgiver. It is the duty of Muslims to follow Allah’s laws and to ensure they apply over the entire globe.

By uttering the formula of submission to Allah:
I confess there is no god but Allah,
and I confess that Muhammad is Allah’s messenger
one is embracing not only submission to Allah (which is what ‘Islam’ means: a Muslim is one-who-submits)—and the obligation to spread submission to Allah—but one is also becoming one of Allah’s people and thus morally superior to anyone who has not so submitted.

This moral superiority has all sorts of implications. It can be morally permissible to lie to non-believers, to take their property, to kill them, to enslave them, to force them to second-class status.

All of this makes Islam an uncomfortable neighbour: both in the sense of being next to Muslim-ruled societies and in the context of having Muslim migrants. Not helped by difficulties in accurately translating key Islamic texts, in not grasping how very different the underlying logic of Islam is from those of Christianity, Buddhism or Judaism—particularly in implications for non-believers—and in the fact that the logic of belief is not necessarily the logic of believers. Someone can be a “cultural Muslim” without embracing all the above implications, particularly regarding non-Muslims and particularly not its most extreme forms.

The human complexity that this logic manifests (or not) within is brought out by an deeply enlightening article (via) by a BBC researcher who ended up having many conversations with the brother of a July 7 bomber.

The brother worked as a taxi driver in Leeds. Like his jihadi brother, he was born in Leeds, children of one of the first Pakistani couples to move to Yorkshire.

The article is a bit like a detective story, but a whydunit? rather than a whodunit?. The author, Shiv Malik’s, local knowledge helps:
… of the four 7/7 bombers—three of whom came from Beeston … I had lived in Leeds for many years, and so I was familiar with Beeston’s shabbiness. Many journalists who landed there after 7/7 saw its poverty and assumed that there must be a direct link to the bombings. But the more we learned about Beeston and its bombers, the more this hypothesis turned out to be a red herring. Although poverty and exclusion are themes that wound their way through the lives of the Beeston bombers, it is the internal frictions within a traditional Pakistani community in Britain that best explain the radicalisation that led to the deaths of 56 people.
It is worth remembering that suicide bombing is a tactic, one not limited to Islam:
Suicide bombing is not just a religious phenomenon. It is employed by many secular organisations, including the Kurdish PKK and the Marxist Tamil Tigers. In fact, until 2000, the Tamil Tigers had carried out more suicide attacks than all other groups put together.
Study of the profiles of suicide bombers have found the motivations are more about sociological characteristics than psychological ones:
Ariel Merari, a Tel Aviv University psychologist, has profiled 50 suicide bombers and found that there were hardly any common factors. None were deranged or schizophrenic. Few had problems like depression. Merari concluded that the only factor linking all forms of suicide terrorism was the way bombers were recruited and trained. It is the psychology of the group, not the individual, that is key.
The problem was not being too disconnected to all human society, but being too connected with a social milieu. One that is, however, hostilely disconnected from the society around it, due to adherence to a “pure” form of the underlying logic of Islam. (Just as Kurdish and Tamil/Marxist identity was hostilely disconnected to Turkish and Sri Lankan societies respectively.)

But why was that identity so hostilely disconnected? British treatment of Muslim immigrants is not remotely like Turkish repression of Kurdish identity or Sri Lankan linguistic exclusion of Tamils.

According to Malik’s research, the answers turned out to be drugs and marriage and the conflicts these caused between first and second generation Muslims.

Drugs was something the first generation migrants from tribal Pakistan had no grasp of how to deal with but some of the second generation Muslims did, with Islam as a unifying motivator:
Ali told me that the older generation didn’t know how to deal with the drug problem. They were largely illiterate and didn’t know the system, so they would sooner move out than try to fight the dealers. The only people who seemed to do anything about the drug-taking were a group of second-generation Pakistanis called the “Mullah boys.” This was a fluid group of 15 to 20 members that formed in the mid-1990s, initially as a response to the drugs issue. Mohammad Sidique Khan was a leading member. Ali told me that on several occasions, the group kidnapped young Pakistani drug addicts and, with the consent of their families, held them in a flat near the Wahhabi-inclined mosque on Stratford Street—and forcibly cleansed them of their drug habits.
Religion motivating social good works: seems a fine thing. Indeed, the parents approved of this religious commitment within the second generation, up to a point:
Initially, this new-found godliness was welcomed by the older generation in Beeston—until the group began marrying people of their choice.
This was defying both parental authority and deeply ingrained patterns which had survival value back in Pakistan but not in England:
In Beeston Hill, the dilapidated heart of Beeston, Pakistanis make up 20 per cent of the population. They are a minority, but large enough to have been able to form their own partially ghettoised and cohesive community. Almost every family is ultimately from a rural part of Pakistani Kashmir called Mirpur, where the rules of tradition are strict and unforgiving. In Mirpur, as in many poor parts of the world, the basic structures of life—justice, security and social support—are organised by the local tribe and not by a central state. One consequence is that people can’t just marry whom they want. If they did, then over time tribal lands would be broken up by the rules of inheritance, and the economic base of the tribe, or baraderi (brotherhood), would be destroyed. This is one reason children in rural Pakistan are often treated as the property of their elders and encouraged, or forced, to marry within the baraderi.
Families that allow children to marry for love are considered to have lost their izzat, or honour. In most circumstances, the only way for the family to regain it is to kill the offending boy or girl. Pakistan has the highest number of honour killings in the world.
When the first generation of Mirpuri immigrants moved to Britain in the 1960s, the baraderi system should in theory have faded away, as social services were supplied by the state. But traditions have their uses for preserving solidarity in a migrant community, and the mechanism still flourishes.
There is nothing specifically Islamic about these patterns. On the contrary, literalist Islam—with its notion that all Muslims are of the one community—gave grounds to rebel against it:
But the Mullah boys were armed with faith. As long as the marriages were between Muslims, they didn’t care about tribal tradition. And since the outsiders all converted to Islam before the marriages, the older generation’s insistence that their young marry their cousins was simply ignored.
So, the older generation’s failure to deal with the drug problem, and their attempt to control the marriages of their sons, both discredited and disconnected their children from them and their attitudes. Conversely, Islam provided a motivation to deal with the former and to marry the women of their choice.

But, of course, the way the form of Islam the second generation was adopting authorized such marriages was to proclaim that Muslim identity trumped all others. Including that of whatever nation-state one happened to be living in.

Migration can be disorienting, so elements of identity can be clung to in all sorts of ways:
Having lived all of his life in Yorkshire, Gultasab, like his brother, spoke with a gentle Yorkshire lilt. But when I asked him where he was from, his immediate reply was Rawalpindi, one of Pakistan’s major cities. This meant the Khans were Punjabi, not Mirpuri. In a Pakistani city, this wouldn’t have meant much, but in Britain, where migration had accentuated small differences, it meant the Khans would have been at one remove from Beeston’s community of first-generation migrants.
He and his brother were born in Leeds but from Rawalpindi. It is like the C19th and early C20th Australian habit of referring to the British Isles as “Home” even if they had never been there.
Markers of identity can work in all sorts of ways:
But Sidique was on a collision course with his family and background. One important reason for this was religion. At some point in the mid-1990s, when he first got involved with the Mullah boys, he became interested in Wahhabi fundamentalism; this pitted him against his family’s traditional approach to Islam.
Gultasab told me that the first time he noticed his brother had become a Wahhabi was when he started praying differently—Wahhabis add extra hand gestures between prostrations. Sidique had attended Friday prayers from a young age, and the three brothers, Hanif, Gultasab and Sidique, would fast together during Ramadan. But it was during one particular Ramadan, when Sidique was in his late teens, that he began to take a greater interest in religion. “As young men of a certain age do,” said Gultasab.
But the traditional mosque set up by the first generation Muslims had a problem:
Gultasab told me that his brother had found that the traditional, community-run mosque on Hardy Street had nothing to offer him. The people who ran the mosque had no idea how to connect with the second generation, said Gultasab. They spoke and wrote in Urdu, and the only time they interacted with the younger Muslims was when they taught them to recite the Koran by rote—in Arabic.
Not so for in the Saudi-funded Wahhabi mosque:
The Wahhabis did things differently. They delivered sermons and printed publications in English. Sidique’s Urdu was poor, so the only things on Islam he could read were Wahhabi-approved publications. Gultasab said that Sidique’s progression to Wahhabism was reinforced by the fact that some of his friends, and future Mullah boys, were converting too.
Saudi financing of Islam around the world is a major problem, since the Saudi state is a jihadi state and adheres (and promotes) the underlying logic of Islam in a very pure form, regardless of the personal peccadilloes of Saudi princes.

This is not a post-2001 problem. On the contrary, it is part of the causes of September 11:
In 1999, it seems that Sidique began to consider the step from Wahhabi fundamentalism to a form of jihadism actively committed to violence. By this time his life had become intensely narrow: the mosques where he prayed, the buildings where he helped to run Pakistani youth groups, the Iqra bookshop where he gave talks, his brother’s house—every place in his life was within a quarter of a mile of the centre of Beeston Hill’s Pakistani community.
This very narrow social milieu was based on opposition to both the first generation of migrants (and why they had come to Britain in the first place) and to the wider society (with its drug problems and serial contradiction of pure/literal Islam). But second generation issues are hardly new in British migrant experience:
Among those who study British race relations, there’s an informal theory that states that 30 years after the establishment of any sizeable ethnic minority community, there will be riots. After Jewish migration into Britain in the 1900s, there were riots in the Jewish communities of east London during the 1930s. After the 1950s migration from the Caribbean, there were riots in 1981 in the Afro-Caribbean areas of Toxteth, Chapeltown and Brixton. And after the 1970s Pakistani immigration into northern England, in the summer of 2001, like clockwork, serious unrest kicked off in Oldham, then spread to Leeds, Burnley and Bradford.
One explanation is that it takes about 30 years for a sizeable second generation to establish itself and then become frustrated with its status, both within its own community and the wider society. This frustration arises in part from a question of identity. Whose culture and values do you affiliate with? Those of your parents or of your friends? Those of your community or of your country?
Which creates an avenue for recruitment:
Hassan Butt, a former recruiter for the British jihadi network (the term violent Islamic extremists in Britain use to describe themselves), who twice met Sidique Khan, says that the reason radical Islamic movements in Britain have been able to recruit thousands of young Muslims is that they have managed to exploit this identity problem.
Identity tensions are explicitly used in recruitment:
Butt told me that as a recruiter, his most important job was to discover what his potential recruit identified with, and then to pick holes in it. For example, if the potential recruit felt Pakistani, then Butt would focus upon the difficulty of being both British and Pakistani. Butt and many other recruiters find this easy because they know what it is like. Having lived in Britain all his life within a strongly Pakistani household, Butt felt neither British nor Pakistani.
So an identity was offered, one that was particularly powerful in a globalised world:
Religion—in this case a purified and politicised version of Islam, far from the traditional “folk” religion of the first generation—was a natural way of transcending this cultural dislocation. “Here come the Islamists and they give you an identity… you don’t need Pakistan or Britain. You can be anywhere in the world and this identity will stick with you and give you a sense of belonging.”
Such recruitment was not only against Western society, but also against the first generation in their communities:
Butt also explained that traditional communities often inadvertently push their young into the arms of the radicals. Attitudes to jobs, dress, schooling and socialising all play their part in driving youngsters away from their parents’ generation. But one of the biggest factors that has helped the growth of British Islamic radicalism is marriage.
Islamism’s most important tenet is that Muslims should not be divided by race or nationalism—that all Muslims are one. It therefore can offer an Islamic route out of having to marry your cousin.
Identity, belonging and romantic love: a powerful combination to disaffected young men. An identity that can become all embracing because it is so psychologically comprehensive:
“When you’re cut off from your family,” Butt explained, “the jihadi network then becomes your family. It becomes your backbone and support.” He added that when you join it becomes impossible to leave because there is nowhere else to go. The network starts operating like a cult.
But a cult with a lot of money and connections behind it:
According to Butt, the other big factor that has helped Islamist recruiters is the fact that in many communities, Islamists are winning what some have termed a “civil war” within Islam. For simplicity’s sake, contemporary Islam can be divided into four schools: traditionalists, fundamentalists, modernists and Islamists. Unlike the split between Christian fundamentalists and other Christians, both Islamic traditionalists and fundamentalists lean towards scriptural literalism. The main difference between the groups is how they regard the 1,400 years of theological innovation since Muhammad’s death.
The Islamist rejection of anything except the original texts creates a powerful, simple and accessible identity. It is also why Saudi Arabia is not a traditional monarchy, unlike the Gulf States, Oman, Jordan or Morocco:
… fundamentalist movements—of which the Saudi-backed Wahhabis are the most important—reject all theological innovation since the life of Muhammad and his closest companions. Muslims, they say, should pay attention only to the holy book and the collected sayings and doings of Muhammad. This is why, over the last 50 years, Wahhabi authorities in Saudi Arabia have demolished more than 300 historical structures in the holy cities of Medina and Mecca. They want to create a timeless Islam.
Remembering also that the most conspicuous achievement of Muhammad’s companions was the greatest burst of religious conquest in history.

A form of Islam rooted in the texts and origins, so an identity available to all, is powerfully attractive in our globalised age. Just as Pentacostalism is the fastest growing form of Christianity:
Islamism, is a relatively recent offshoot of fundamentalism. It emerged in response to the final demise of Islamic authority with the fall of the Ottoman empire after the first world war, but harks back to the early days of the caliphate, when the Koran was the basis for law-making. It sees Islam not just as a religion, but as a socioeconomic system. The Koran is God’s version of Das Kapital. Islamists pick and choose teachings from across the ages, and while they read script literally and share a religious zeal with the fundamentalists, they are more akin to an ideological movement than a religious one. Their style of work is often compared with the student far left of the 1960s and 1970s.
While many of its features Islamism shares with fascism, in others it is more like Leninism or Trotskyism. There is certainly an argument for treating Saudi funding of schools and mosques as being in the same category of Soviet funding during the Cold War. (That Kim Philby’s father St John Philby was the India Office’s liaison with the al-Saud during World War One and converted to Islam even provides a family link.)

And Islamism has been winning among second-generation Muslims:
Butt says that the war between these schools [traditionalists, fundamentalists, modernists and Islamists], which has been playing out across the Muslim world for decades, has ripped into Britain’s generation gap—and that the Islamists are winning.
In ten years of recruiting, Butt says that he always wanted a theological clash, but it never came. “The traditionalists and the modernisers just wanted to run their own study circles without interference.” On the other hand, if the jihadi network see someone with strong Islamic tendencies, “the moment he leaves his house in the morning, they’re there until he returns to his house in the evening.” Butt also says that unlike the traditionalists, the network won’t judge a potential recruit on his actions. “If the network see a drug dealer or someone from a gang, they will not condemn him like the traditionalists and say ‘oh brother haram, haram [forbidden].’ What they’ll try to do is to utilise his energy.”
They are, after all, offering an identity open to all if you just accept their doctrines. Hence radical Islam has been penetrating Western prisons quite successfully. A violent ideology has something to say to the violent.

Saudi money is a vital part of the pattern:
There is also an economic dimension to the outflanking of the traditionalists. Since most of traditional Sunni Islam is devoid of an organised establishment, the money for running a mosque normally comes directly from the local Muslim community. In Britain, this means that in order to maintain community harmony, the teachings remain bland and the imam will avoid theological controversy. It also means that once there is enough money to run the mosque, there is no incentive to find new believers.
On the other side, British fundamentalists and Islamists are centrally funded. It is estimated that over the last two decades, Saudi Arabia has set aside $2-3bn a year to promote Wahhabism in other countries. It is not known how much of that money has come to Wahhabi groups in Britain, but one major recipient has been the Leeds Grand Mosque.
Islamist groups like the Muslim Brotherhood and Hizb ut-Tahrir are also centrally funded. They gather money from members, pass it to a central administration which then hands it back out again. These groups’ lack of local community focus means that they have to compete harder for “market share,” which has made them hungrier and more efficient.
With better techniques, resources and incentives operating for the Islamists, the traditionalist Islam of the first generation is losing out:
So while traditionalist mosques carry on recruiting imams from back home, keep their sermons in Urdu and other Asian languages and neglect to publish material to engage new members, the Wahhabis and the Islamists give their sermons in English and take their recruitment on to the streets of Pakistani or Bangladeshi ghettos such as Beeston Hill. They have also encouraged the schooling of British-born imams, have learned to use the internet and have generally come to understand what makes the second generation tick. The Wahhabis and Islamists win new members by contrasting their galvanising message of world Islamic justice with the inactivity and irrationality of the first-generation traditionalists. (Among those who turn to violence, such as Khan, their beliefs are often a mix of fundamentalism and Islamism.) And by arguing that the traditionalists—with their saint worship, mysticism and forced marriages—have been corrupted by weakness and Hinduism, they provide useful arguments to those Pakistani and Bangladeshi youths who want to cling on to Islam but throw off their parents’ constraints.
A techno- and generational savvy-ness which is bearing violent fruit:
For all these reasons, many British Muslim youths who had drifted towards fundamentalist or Islamist organisations were susceptible to the violent global jihadism that emerged in the mid-1990s. This is plain from the anti-traditionalist rhetoric of Sidique Khan’s al Qaeda-produced video suicide note. … It has two parts, but it is only the first—about British foreign policy—that ever gets played in the mainstream media. Part two, which makes up three quarters of Khan’s speech, is addressed to Muslims in Britain. Here is an excerpt: “Our so-called scholars today are content with their Toyotas and semi-detached houses. They seem to think that their responsibilities lie in pleasing the kufr instead of Allah. So they tell us ludicrous things, like you must obey the law of the land. Praise be God! How did we ever conquer lands in the past if we were to obey this law?… By Allah these scholars will be brought to account, and if they fear the British government more than they fear Allah then they must desist in giving talks, lectures and passing fatwas, and they need to sit at home and leave the job to the real men, the true inheritors of the prophets.”
An identity both grounded in history but released from it, one that gives identity, status and extols an aggressive masculinity. A potent brew.

And one that sets up conflicts between and within Muslims. Perhaps the most potent lesson from Eamon Duffy’s brilliant study of a Reformation parish, The Voices of Morebath, was that the religious strife of the C16th was one that ran within as much as between people. There are many similarities between the dilemmas of that time and now—hence the return of the issue of torture—and the tension between secular ethics and Islam is very much a reprise of similar tensions back then:
For some reason, I translated my usual question of whether he thought what his brother had done was “good” or “bad”—he had said that it was a terrible thing several times—and instead asked him whether he thought 7/7 was halal (permitted) or haram (forbidden) in Islam. Only when a look of stunned surprise come over Gultasab’s face did I realise that I must have been asking him an entirely different question. After a brief pause, he replied. “No comment.”
Here, it seemed, was the perfect example of the division between two worldviews—secular ethics and an embattled Islamic faith. How long had Gultasab managed to function with these two conflicting positions fighting within him? Everyday morality told him that his brother had committed a cold-blooded act of terror, while his own Islamic theology told him that there was no clear answer and maybe, in some parallel universe, his brother was a kind of hero. How many thousands of young British Muslims are similarly conflicted?
A conflict made all the more potent by the clash over the right to marry:
And after Sidique got married, on 22nd October 2001, the links between father and son were cut. No longer rooted to his family, Sidique’s immersion into Britain’s network of jihadists was complete.
This is not merely a conflict between certain conceptions of Islam and the West (or, indeed, the Rest), it is also a conflict within Islam:
Khan may have felt indignant about western foreign policy, as many anti-war campaigners do, but that wasn’t the reason he led a cell of young men to kill themselves and 52 London commuters. At the heart of this tragedy is a conflict between the first and subsequent generations of British Pakistanis—with many young people using Islamism as a kind of liberation theology to assert their right to choose how to live. It is a conflict between tradition and individuality, culture and religion, tribalism and universalism, passivity and action.
If the conflict is within Islam—far more Muslims than non-Muslims have been killed by the jihadis—what can non-Muslims do? Not much except endure until it burns itself out is Malik’s answer:
When it is stated like this, the problem of Islamic extremism looks depressingly intractable. … But maybe all that we can do now is remain vigilant and wait for the tide in the battle for Islam’s soul to turn in the west’s favour.
But why would it do that?

There are two strategic arenas: separate but related. One of them is the conflicts within Islamic societies. The other is the question of integration of Muslims into Western societies.

Here the worst thing that can be done is some sort of balkanizing multiculturalism. There are certain base values that cannot be compromised because to do so makes the jihadi goal look achievable. Equality before the law, the secular basis for law, that sovereignty is human not divine, the primacy of democratic processes. The acceptance of cultural diversity cannot be done at the expense of a certain basic legal and political coherence. In particular, the notion that one’s primary public, legal and political identity is one’s religion is not acceptable.

For one can make moral claims against human sovereignty: such claims cannot be made against divine sovereignty and so its absoluteness destroys compromise and accommodation. That was something Europe and its descendant cultures learnt the hard and brutal way through its Wars of Religion. These are not lessons to unlearn, just as the unacceptability of torture is not a lesson to unlearn.

Torture is back as an issue because an external conflict has internal resonance—just as Elizabethan England had to worry about whether local Catholics accepted English sovereignty or were bitter enemies, so now Western countries have to worry about whether local Muslims accept Western sovereignty or are bitter enemies.

But just as the solution of barring torture should not be unlearned, the lesson of subordinating religious to political identity should not be unlearned either. On the contrary, it should be promulgated loud and clear. We should not be passive spectators in Islam’s debates because those debates are not merely an internal matter but bear very precisely on what it means to be a Muslim, and, more to the point—because of the logic of Islam—to not be a Muslim.

Friday, June 11, 2010

Grasping the past (6): Islamofascism

I have not read any of Paul Berman’s books but I have read some of his articles, which I have found enlightening. A recent interview with him traverses a range of issues that few liberal intellectuals are willing to consider as bluntly as him.

In particular, Berman is more than happy to explore the connections between fascism (specifically Nazism) and Islamism, which are deep. The jihadi push has long struck me as the Islamic equivalent of European fascism: a modernising revolt against modernity.

A central figure in the links between Nazism and Islamic militancy is Mohammad Amin al-Husayni, the Grand Mufti of Jerusalem, an active Nazi collaborator, including in the Holocaust. His significance to the Nazis was directly connected to his connections to the Muslim Brotherhood. As Berman says:
But Nazi awe of the Mufti also had plenty to do with the support graced by al-Banna’s Muslim Brotherhood, as it went through its growth spurt. While other war criminals were facing trials after the war, the Mufti, who had called for eradication of the Jews, received a hero’s welcome in Eqypt. This was thanks to al-Banna.
Al-Husayni (or al-Husseini) used violence as a weapon both against Jews and fellow Palestinians:
A Palestinian Arab revolt got up against the Zionist movement, with various wings. The most militant of the wings was led by the Palestinian leader, the Mufti Haj Amin al-Husseini, whose doctrine was Islamist, and Arabist. The Mufti supervised the assassination of quite a few of his rivals among the Palestinian Arabs. So he had just a dreadful effect on Palestinian political culture. And he himself was very attracted from the start to the Nazis. He approached them in 1933 or so. The Nazis began supplying aid to him. By the time an armed revolt had gotten started in 1936 it became one of the proxy wars that was going to lead to World War II.
Nazi propaganda was targeted at the Arab Middle East:
The Germans had a vast short-wave radio propaganda system going on throughout the Arab world and no one has ever found the tapes of those broadcasts. And no one has ever found a German transcript. But Herf had the brilliant idea of checking around to see what might be available in the State Department archives. And there he found it.
This Nazi propaganda fed a series of ideas into the Arab world which still resonate:
The most important of the ideas is that the Jews are a demonic and supernatural force. The goal of the Zionist project in this picture was to destroy the Arab world and replace it with a giant Zionist state.
Al-Husayni wanted Jews not merely resisted, but slaughtered:
Yes, the Mufti calls on the Arabs and Muslims to rise up and massacre the Jews. …
Indeed, at times, he was keener on the exterminationist aims of the Holocaust than the Nazis themselves:
There were a number of times when the Nazis were willing to allow some groups of Jews to leave Europe and escape to Palestine and a large number of children. The Nazis had wanted to do this as a kind of phony propaganda effort to show that they were nice (and anyway expected the Jews to be exterminated in Palestine by the Arabs, or by themselves when they eventually got there). And the Mufti agitated against this. The Mufti was calling successfully for the Nazis to show no clemency and instead send these Jews to Poland, which is to say to be murdered.
Al-Husayni was very much the Nazis kind of guy but, unlike other prominent Nazi supporters in the West after the Nazi defeat, he found the Muslim world welcoming.

My analysis of al-Husayni is that he was a member of the Palestinian landlord class whose social control, based on debt bondage, was being disrupted both by the rising wages created by Jews increasing the capital levels in Mandatory Palestine faster than they increased the labour force and by other migrants from the rest of the Middle East drawn by the rising economic opportunities. Religion and Jew-hatred (which also allowed incorporating Christians, who were particularly prone to Arab nationalism since that did not exclude them or give them second-class status) provided a way to shore up the position the landlord class, which was not able to compete in providing expanding opportunities via modernisation. So al-Husayni used modern political methods to fight against the implications of modernity: a modernising revolt against modernity with an aesthetic, rhetoric and reality of violence in classic fascist style.
Al-Husayni was also part of wider currents of opinion:
The Nazis respected him, he was a genuine war criminal who was able to convince them to take a harder line. And one of the real reasons for the Mufti’s power and influence among Nazis was the support and fealty he was getting from the Supreme Guide of the Muslim Brotherhood in Egypt, Hassan al-Banna. So there were close connections and an ideological development.
The ideas continue to resonate. Including in figures who Tariq Ramadan treats reverentially:
Because once you’ve read these Nazi propaganda things and the Mufti’s speeches from the nineteen forties and then you turn and look at Sayyid Qutb from the nineteen fifties and sixties and then you turn and look at Sheik Yusuf al-Qaradawi from our own moment, you recognize that Qaradawi is repeating almost word for word the Mufti’s Islamic Nazi propaganda from the nineteen forties calling for extermination of the Jews, interpreting Hitler as sent to do God’s work, which was a major theme of Nazi propaganda. And then you look at Ramadan’s writings; you realize that if Ramadan has a single great hero, it is Sheik Qaradawi. It’s in one book after another. Now his relationship to Qaradawi is a little complicated. And in recent years he’s gotten into quarrels with Qaradawi, although not over these issues. He’s remained to the present absolutely reverential.
Given this ideology of slaughter and martyrdom by killing, the implications continue to lead to death and destruction:
Qaradawi thinks the Palestinians should go kill themselves in the course of murdering as many Jews as possible. Let me emphasize here that if these people have committed a really terrible crime, it’s above all against the Palestinians. People don’t talk about this. These are the kinds of ideas and the kinds of leadership that have done so much damage to the Palestinian people, who have legitimate grievances, legitimate rights, whose human rights must be respected, who need a state, who stand in need of actually everything.
In many ways, the Palestinians are very much the central victims al-Husayni’s actions and ideas, with a deeply corrupted political culture:
First of all, the Mufti has victimized the Palestinians by murdering all their best people. But the whole political project that comes out of him and out of al-Banna has victimized the Palestinians by instructing the Palestinians that they are in a supernatural struggle against demonic enemies. If you think that you are in a struggle with human beings and recognize that while you have needs other people also have needs, then you’re in a political situation. And the natural thing to do when you’re in a political situation is to strike a compromise. But this has not been the line that has come out of the Mufti and al-Banna. The line has been that it’s a religious struggle of Islam trying to prevent satanic Jews from exterminating Islam and that the only way to deal with it is to exterminate the supernaturally evil Jews. So the struggle is a religious and supernatural struggle. It becomes impossible to compromise, and becomes possible to think one’s own suicide might be an appropriate response because we’re in the realm of the eternal and the supernatural. So it prevents people from being able to make compromises and leads them to think that murder and suicide are principles that must never be yielded. The Hamas charter is the perfect example. It begins with a little quotation from the Koran, a quotation from al-Banna calling for the elimination or obliteration of Israel (it’s translated in different ways) then it goes on to cite the Protocols of the Elders of Zion, which is a fundamentally Nazi document, then in Article 7 it draws a quotation from one of the scriptural traditions which would seem to call for extermination of the Jews. …
But I don’t think that the Israelis have created the Palestinian political culture. The rise of these Islamist ideas among the Palestinians owes to the power of the ideas themselves, to the leaders who have promoted them, and to the support that other people around the world have given to these ideas.
Given the reality of various oppressions in the Islamic world--of women, of non-Muslims--the anger of the refugees and apostates is something Berman understands and provides a revealing comparison to:
When you go around and look at one dissident intellectual after another who has come from a background dominated by Islamism, quite a few of them have an angry tone. And they don’t sound very moderate. They sound furious and they sound frightened and I think this is to their merit, because they are expressing their actual reality. What I wonder about is why others don’t sympathize with this, with this anger. And it was the same kind of thing that was said about the Soviet dissidents. They would escape from the Soviet Union and they would not say, “Oh, it’s necessary to have some reforms introduced into the Soviet Union.” Rather, they would say, “Communism is really bad and ought to be overthrown.”
There is far more to the dynamics of Muslim politics and Islamic radicalism than the (relatively brief) experience of European colonial rule. It is a sign of the deeply condescending and patronising attitude of many Western progressivists to Arabs (and Muslims generally) that explicit Nazi connections which would lead to the virulent denunciations of fellow Westerners (or of non-Western allies of the West) are passed over in embarrassed silence, ignored or belittled. For the denouncing fellow Westerners and Western allies feeds progressivist status games while denouncing Arabs or Muslims on the same grounds undermines them.

Instead, we are left with a Middle East, and a Palestinian-Israeli conflict, which is imagined, caricatured and framed according to such Western status games, rather than upsetting realities. Veteran journalist Helen Thomas’s recent outburst calling for Israeli Jews to “go back to Germany and Poland” is a case in point. As I pointed out here, Israeli Jews are not even close to being just “European migrants”: and even those who were had grave problems in simply "returning" (via). Many Israeli Jews are of Middle Eastern origin. But Israel accepts Middle Eastern Jews as citizens, while the Arabs prefer to leave Palestinians as stateless sticks to beat Israel with: hence third, fourth, even fifth generation Palestinian “refugees”. So Jewish refugees are invisible to the progressivist conscience while Palestinians are endlessly worthy victims. Just as nine activists killed while attacking Israeli commandos are a global cause célèbre yet Chinese riot police can kill 140 Uighurs and it is completely non-newsworthy.

‘Islamofascism’ is not a silly term, it has a lot of clear history behind it and is, in fact, very revealing about the jihadi impulse: one which is Jew-hating, glorifies violence, maintains an aesthetic of violent heroism, is based on veteran-mystique, abhors liberalism in all its forms and uses the techniques of modernity in a revolt against the patterns and consequences of modernity.

To ignore all that in the name of progressivist status games is not “reality based politics”. It is the very opposite of that. Good on Paul Berman that he is prepared to look at reality directly and convey to the rest of us what he sees there.

Tuesday, June 8, 2010

Scary Demographics

This (greatly) extends a comment I made here.

There are some demographic realities about Europe that are fairly clear. The first is that the European welfare state is fiscally and demographically not sustainable. The current euro crisis is the intersection of two things:
(1) Establishing a common currency without sufficient institutional underpinnings to made it work.
(2) Fiscal profligacy intersecting with adverse economic conditions, including inability to use currency devaluation to make adjustment easier, due to (1).

It is not the last such crisis Europe will experience as long as it maintains the two basic causes: a common currency without sufficient institutional commonality and welfare states which do not have the fiscal/demographic basis to be sustained at the current levels.

The second demographic reality that is fairly clear is that the “Scandinavian” (or, if you prefer, the “Swedish”) model is not sustainable if Scandinavia continues to import migrants too culturally distinct to preserve the existing public policy regime. Scandinavian social democracy was developed in largely monocultural societies that consequently had high levels of communication between official and citizens, high levels of commonality in expected behaviour. This minimised levels of waste, inefficiency and abuse of the system while permitting much easier design and operation of the system, given people were overwhelmingly operating off a similar set of expectations and responses.

The Muslim migrants have greatly variant expectations, aspirations, outlooks and with much less effective levels of communication with officials. This greatly increases the levels of dysfunction: including much higher levels of crime, unemployment and welfare expense. And it is harder for Muslims to integrate into Western society: particularly if multiculturalist welfarism operates to systematically undermine any incentive to do so. As the work of Danish psychologist Nicolai Sennels (long interview here, another here, here, here and here) brings out rather starkly:
A French survey in Le Figaro showed that only 14 percent of the country's estimated five million Muslims see themselves as "more French than Muslim." Research (pdf) made by the German Ministry of Interior shows that only 12 percent of Muslims living in Germany see themselves as more German than Muslim. A Danish survey published by the pro-Muslim pro-democratic organization Democratic Muslims led by the Danish PM and Muslim Naser Khader showed that only 14 percent of Muslims living in Denmark could identify themselves as "Democratic and Danish."
A major sign of the failure of such integration in Europe is that younger generations of Muslims are generally more committed to their Muslim identity—one typically manifested against the surrounding Western societies—than their parents.

Either Scandinavia is going to have to find some way to turn Muslims into “little Scandinavians” culturally fairly speedily or they are going to have to substantially change their public policy model to cope with this cultural diversity or they are going to have to expel the migrants: failure to adopt any of these strategies will just lead to mounting expense, social dysfunction and political angst.

Supplanted majority?
These are big issues. But there is a much grander scenario being sketched, notoriously in Mark Steyn’s America Alone, which is of a demographic collapse leading to a Muslim majority Europe.

In his Afterword to his dystopian C22nd SF thriller Caliphate (which is quite a good read if you like military SF), Tom Kratman sketches out the scenario. The argument is deceptively simple: if 100 European women have a fertility rate of 1.6 children per woman for three generations while 10 Muslim women have a fertility rate of 4.2 children per woman for four generations (due to marrying younger), in a hundred years one ends up with the 91% having 49 descendants and the 9% having 193 descendants.

There are some major problems with scenario. The first is estimating the size of the Muslim population in Europe. France, for example, studiously refuses to even collect such statistics. The demographics of France turn out to be fascinating, as France is having quite the prolonged population boom, after a long period of very low comparative fertility rates.
The Muslim numbers do not seem large enough without very high fertility rates indeed to be skewing the overall figures down to the 1.6 fertility rate among ethnic French he posits (particularly given France is coming off a decades-long fertility boom), though the French state's coyness about such matters does leave a large hole for scare-mongering. And France does have a major problem in the banlieus. Caused in part by disastrous labour market regulation. But it is traditional in France to treat the underclass like crap.

Yet Kratman’s scenario posits such high fertility rates. The French Muslim population mostly originally came from Algeria (fertility rate of 2.38), Morocco (2.38) and Tunisia (1.93). So, to make his scenario work, we would have to presume that Muslim migrants (first and succeeding generations) have a much higher fertility rate than their feeder countries: which is not very plausible.

Then there is the problem that Kratman posits a century of constant fertility rates: this is even more deeply implausible. First, fertility rates are clearly related to income: rising income leads to falling fertility rates.

Second, fertility rates can change over time: sometimes quite dramatically. One of the great unknown demographic facts: which country has had the fastest fertility collapse recorded? Iran. Why would an Iranian woman—with access to contraception—bring either a daughter to be oppressed, or a son to be an oppressor, into the world of the mullahs? (The high fertility rate of Saudi Arabia [3.31]—where women are much more oppressed than they are in Iran—sadly suggests sufficient levels of systematic misogyny can keep fertility rates up, though even in Saudi Arabia fertility rates are dropping.)

Revealingly—in order to make his scenario work to create a Muslim-majority Europe—Kratman has to posit the extra push of greatly expanded Muslim immigration to Europe (due to a devastating US nuclear attack on the heartlands of Islam in retaliation for terrorists nuking Los Angeles, Boston and Kansas City). This both expands the base of the Muslim population and leads to “white flight” from Europe to North America, the Antipodes and South Africa.

Kratman does have a point in that “white flight” could become an issue. Migration from the Netherlands has increased significantly in recent years as dealing with the Netherlands Muslim minority becomes more fractious (notably via the murder of Theo van Gogh) and murderously controversial. As welfare obligations bear down on a shrinking youth population that could also encourage emigration by young adults.

But, here’s the thing. The looming fiscal collapse of the European social welfare states is likely to have several effects. First, greatly reduce the attractiveness of Europe as a destination for Muslim migration: both due to greatly reduced welfare and because of economic and social turmoil. It is notable that two-thirds of those emigrating from the Netherlands, for example, are not ethnically Dutch.

Second, when the state fails, people retreat into their families. This encourages rather than discourages fertility.

A major collapse of the European welfare state is likely to encourage “white flight” but also, as we have already seen, immigrant flight.

The upshot of all this is that any scenario which posits a century of constant (and constantly different) fertility rates (including Muslim fertility rates higher than in the feeder countries: the very high Palestinian fertility rate, if it is accurate, is in part due to the EU using aid [pdf] to wage demographic warfare against Israel) is the one thing that will not happen.

Europe has major demographic problems with grim implications. A Muslim majority is not likely to be one of them.

ADDENDA This post has been lightly edited to clarify meaning.

FURTHER ADDENDA The classic alarmist video: like to know where they got some of their figures. A rebuttal: more details.

ANOTHER ADDENDA Why not to buy into the Great Muslim Demographic Threat is set out very well by Razib Khan here.