Nordic, schmordic

So, Tim Worstall has invoked the recurring fascination of Anglosphere progressivists of various stripes with adapting the Nordic model to Anglo societies (in his case, the US).

It is a very bad idea.

A recent report (pdf) by Swedish-Kurdish economist Nima Sanandaji, whose Tino brother runs the excellent -- and very empirical -- Super-Economy blog, goes into considerable detail why, for the report provides some revealing comparisons with the US as it the examines the sources of Swedish success (or not).

For example, Swedish-Americans have a 50% higher per capita income than Swedes but (using American benchmarks) the same poverty rate as Sweden (p.21). So, this "natural experiment" suggests that the American model is better for Swedes than the Swedish model is.

One reason for the better performance is that Sweden had no net private sector job creation from 1950 to 2010.  All employment growth was in the public sector, while the overall employment/population ratio fell (p.14).

The American model is also better for migrants than the Swedish model.  In the words of the report (p.27):

Between 1993 and 2000, the income from work for the average Iranian immigrant was only 61 per cent of that of a native Swede and that of the average Turkish immigrant 74 per cent (...). This contrasts with the situation in the USA. According to the US Census for 2000, those born in Iran had an income that was 136 per cent of the average for native-born residents, compared with 114 per cent for those born in Turkey (US Census, 2000). Clearly, similar groups of immigrants had very different opportunities in the USA compared with Sweden.

The lack of private sector job creation would go a long way towards explaining why migrants generally do much better in the US than they do in Sweden.


The report points out that Sweden was a highly successful society before the expansion of the welfare state, with high rates of economic growth and low levels of income inequality.  The expanded "Swedish model" degraded Sweden's relative economic performance, in part through the suppression of entrepreneurship. The dramatic drop in the creation of new businesses has seen entrenchment of very unequal wealth distribution (more so than the US).

The expanded welfare state has also seen increases in wealth (and income) inequality in recent decades due to welfare dependent households that do not save and often have negative or zero assets (p.20). Migration has also increased inequality.

Sweden was a successful society because it had good institutions, with strong social cohesion and high levels of trust. It has remained, apart from the labour market, a country whose markets are generally lightly regulated (as is also true in the other Scandinavian countries; they generally score persistently high in economic freedom). The issue here is, as so often, secure freedom; the wider the ambit of the secure freedom to transact, the more transactions there will be. High levels of trust makes for more secure and lower cost transacting, hence more transacting and so more economic activity.

If one has an extensive welfare state, then lots of people will learn how to be good at being dependant on the welfare state; this is just natural, since it is likely to offer the best return for their efforts (particularly when the value of extra leisure is taken into account). This then has effects on social attitudes. For example, when Swedes were polled on whether they agreed with the statement "claiming government benefits to which you are not entitled is never justifiable" there was a dramatic shift in attitudes over time (p.25):

1981-84  81.5%
1989-93  74.5%
1994-99  57.9%
1999-04  55.3%
2005-08 61.0%

Clearly, a welfare state where there is strong social consensus that you do not claim unjustified benefits is going to work more effectively (and more cheaply) than one where "get what you can" becomes increasingly the attitude. (The mild shift back towards earlier attitudes coincides with a shift to the right in Swedish politics.).The extensive welfare state -- what progressivists normally point to when talking of the "success" of the Swedish model -- does not explain Swedish success. That is a result of social cohesion, a high trust society and secure freedom to transact (again, apart from a highly regulated labour market). The level of social cohesion likely helped produce the extensive welfare state, due to a strong sense of common identity. It also likely ameliorated its deleterious effects. Consider this comment by economic historian (and Nobel laureate) Douglass North:

The implications of ideological consensus or ideological diversity for our modeling of institutions should be clear. To the degree that the members of a society have the same ideological framework, the formal rules of the society that define the constraints making up institutions will not have to be defined very clearly and enforcement mechanisms and procedures may be minimal or even absent altogether. But to the degree that society has diverse ideologies reflecting the growth of specialization and division of labor, more resources will have to be devoted, first to defining the rules precisely, and second to enforcing those rules. Such definition and enforcement is necessary because, with conflicting ideologies, the individual participants will feel no necessity to constrain individual maximization (cheating, shirking, etc.) at the expense of the other party. Given the costliness of measuring performance, ideological consensus or alienation is a fundamental influence upon the form of institution.

Adjusting that from ideology to culture, relatively small, strongly culturally homogenous societies can achieve outcomes through centralised provision that larger and more diverse societies simply cannot by such means. Even the much greater geographical diversity of a US or Australia makes the Nordic model problematic, without getting into the much greater ethnic and religious diversity.

Indeed, if Sweden keeps importing Muslims migrants at the rate it has, Sweden won't be able to run the Nordic model any more, because the level of social commonality needed to make it work just won't be there. Moreover, the evidence such that trust levels persistent (i.e. the trust levels in various ethnic groups continue to reflect the level of their originating cultures) -- so importing migrants from low trust societies will also have persistent (negative) effects on level of social trust. Which affects what sort of policy regime is sustainable. Even without considering some of the more dramatic issues.

So, it is hardly surprising that Swedish policies are increasingly moving in a more "Anglo" direction; the more socially diverse their country becomes, the more their policy patterns will tend to become more like countries which have always been much more socially diverse. So, trying to adopt the Swedish model to ethnically diverse "Anglo" societies is a very bad idea, one that is a complete misreading of the basis for Swedish success and the implications of social diversity for public policy regimes.

I long ago reached the conclusion -- in large part from observing how disastrously badly extensive welfare policies failed to cross, or deal with, cultural divides in indigenous policy in Australia -- that the Swedish model was grotesquely inappropriate to Australia (and even more so for the US). There has been a persistent delusion that the Scandinavians were somehow "nicer", "more moral", than us retrograde Anglos when the relevant policy regimes were much more explicable as broadly rational responses to quite different social conditions. Australia in particular -- which actually does better than Sweden in the UN's Human Development Index, for example -- has no good reason to adopt the Swedish policy regime and lots of very good reasons not to.

[Cross-posted at Skepticlawyer and at Critical Thinking Applied.]

The problematic birth of macroeconomics

This is based on a comment I made here.



From reading David Glasner's Uneasy Money blog, I have developed a general thesis about macroeconomics.

(1) Modern macroeconomics was kicked off in the reaction to the 1930s Depression.

(2) The 1930s Depression was a seriously abnormal event.

(3) Being framed by a seriously abnormal event, and by two charismatic economists (Hayek and Keynes) who were both significantly wrong about said event, set macroeconomics off on a deeply flawed course.

(4) How flawed is shown by economists failing around when confronted with another deeply abnormal event 80 years later.

The WSJ Op.Ed. pages are a particularly egregious example of (4). A sort of bad monetary economics thinking grease trap.

This could be called "the Glasner-Sumner thesis", since I came to it by reading David Glasner's Uneasy Money blog and writings by its author having already absorbed from Scott Sumner that the economics profession had largely gone off the rails in its response to the Great Recession.

Feeling a little out of place

I had a avoided the Glee thing -- too much of a cliche, gay man has to like a TV show about putting on musical numbers with a gay character. Alas, I started watching it during the flights on my recent overseas trip and have to confess to enjoying it a lot.

Rolling Stone magazine have produced a very amusing character moment for Kurt Hummel, the gay kid (played by actor Chris Colfer).

I am guessing his drink is a Green Dragon rather than a Grasshopper (further possibilities here). Can we suggest what tune the young guy should now launch into? (Would Macho Man work in a falsetto?)

Or perhaps, there is a bear in there?

A fight over money

Over the last twelve months or so, the blogosphere saw another round of a long-standing fight over money. Not over getting more money (though that is an element too), but its nature and history.

A story about debt
The aforementioned tussle has been provoked by the publication of David Graeber's intriguing, but seriously flawed, book Debt: The First 5,000 Years. Graeber takes strong issue with much of economics in general and with the barter-then-commodity theory of money in particular. This is a theory of the nature and origins of money which dates back to Adam Smith and was famously stated by Austrian economist Carl Menger in his short 1892 essay On the Origin of Money which took further comments made in his 1871 Principles of Economics. Austrian school economist Bob Murphy has provided a useful summary of Menger's theory, as extended by Ludwig von Mises.

Graeber has done what authors do and engaged in various interviews to promote his book, one of which was posted here. Bob Murphy leapt to the defence of the Smith-Menger-Mises tradition, critiquing what Graeber had to say in the interview without, alas, having actually read the book. Graeber responded in turn, to which Murphy then responded. Graeber has since posted a nice summary of his thesis as a wrap-up to this interaction. (One of the sub-themes of which includes the issue of how blogosphere promotes quickie, congenial attacks by the ideologically hostile, including negative Amazon reviews.) Bob Murphy did get around to reading and reviewing Graeber's book.

Economist and Adam Smith scholar Gavin Kennedy has posted a much lengthier, and more nuanced, set of critiques of Graeber's book than Murphy's original posts. There is even the requisite Marxist critique of Graeber for lacking an underlying economic theory and being a romantic.

Meanwhile, economist Jeff Hummel has also posted a critique of Graeber's book. He does a good job of defending economics and economists from Graeber's wider attack, but does much less well in his critique of Graeber's central thesis. Hummel writes that Graeber:

makes several different historical claims, not all of them compatible:
(1) Credit transactions preceded and dominated spot transactions in early human societies.
(2) Media of account emerged before media of exchange.
(3) Barter was unknown (or at least extremely rare) WITHIN early human societies.
Notice that point (1) is incompatible with either (2) or (3). Early credit transactions must have involved barter (contradicting number 3) or media of exchange (contradicting 2). There is no other logical possibility. Yet because Graeber's peculiar concept of barter excludes a farmer trading a pig for delivery of an ax in two weeks (to use Murphy's example), his claim that barter was non-existent tends to become true by definition. Murphy was not the only one to catch this semantic sleight of hand; it is even exposed by an Amazon commenter on the book.
Graeber's terminological tautology appears to stem from his confusing (a) the limited ability of credit to mitigate the problem of the double coincidence of wants with (b) the substantial ability of multilateral exchange to do so. Multilateral networks are in reality what he is partly describing when he invokes "systems of broad, non-enumerated credits" (more on the "non-enumerated" part below). Consider the standard three-person THEORETICAL trading problem, where A wants only what B is selling, B wants only what C is selling, and C wants only what A is selling. The lack of a double of coincidence of wants can be solved by using one of the goods as a medium of exchange in two bilateral trades OR by conducting a single multilateral trade. Obviously for small groups, where people know and trust each other, the latter is often more likely and convenient. Whether such a multilateral exchange takes place at one moment in time (a spot transaction) or is extended through time (a debt transaction) is of secondary relevance, although the possibility of debt transactions certainly increases the potential scope of multilateral exchange.

This is a damming critique of a thesis which, alas, is not Graeber's. If exchanges of goods and services are intermediated, to what extent are such exchanges then barter? Graeber's central point is that early human societies did not involve spot transactions within them. Instead, people operated within dense webs of connections and that transfers of goods and services occurred within, and as expressions of, those connections. Graeber is taking further patterns described in Marcel Mauss’s classic 1923-4 text The Gift: The Form and Reason for Trade in Archaic Societies. Now, Graeber describes the underlying principle as "communism", which is both provocative and misleading. It certainly wasn't the case, for example, that there was no sense of private property. But seeing connectedness as the central feature leads one to view exchanges very differently than a view which takes methodological individualism to imply the "natural" economy is a series of spot trades.

Social connections
What Graeber is describing is transfers of goods and services that manifested felt obligations; obligations that were informal, personal and involved life-time "games". Including a sense of indebtedness that could be discharged in various ways. So credit exchanges need not involve specific media of exchange; any appropriate good and services would do. Units of account could thus easily predate media of exchange; they were ways of keeping track of obligations in the goods and services economy. (Indeed, various modern economic models treat money precisely like that, as ways of keeping track of prices, debts etc in the "real" or goods and services economy.) Moreover, having such units of account immediately provide some of the transaction cost advantages of money without having actual physical money in any useful sense.

Assumption of debt by guarantor

It is clearly true that foraging societies involved implicit exchanges between hunting males and gathering females; an early use of comparative advantage that improved allocation of resources for the purposes of getting food, distributing risks and raising children. Graeber's point is that this did not involve a series of spot trades ("this chicken for those yams") but roles which connected and obligated--we provide the meat, you provide the fruit, grain and vegetables. Now, there is an exchange going on here, but it is not "barter" in the sense of spot trades. It is only when you have interactions outside these dense webs of connections that spot-trade barter makes sense.

Think of a family-and-friends barbecue.  People do not engage in spot trades. They contribute various things and, over time, people have a sense of who contributes what and whether they are "pulling their weight" in the web of connections which come together in said barbecues. Well, in a foraging society, every meal is a group barbecue embedded in connections. Describing what goes on as "barter" is true in one sense (good and services are being exchanged without money) but very misleading in another.

Medieval tax tallies

Graeber's point is that credit, debt and units of account grow out of connections, not out of spot trades.  Which is highly plausible and accords with much archaeological and anthropological evidence. Even taking things forward several millennia; to describe manorial economies as "reversion to barter" simply because use of coins dropped dramatically shows a gross misunderstanding of how manorial economies work.

So far, so good. That, however, the inadequacy of the spot-trade barter story, or implications from it, somehow invalidates mainstream economics does not follow even though Graeber wants to imply that somehow it does.  And Graeber does not help his case by being very cavalier about historical facts. He is, for example, perfectly correct that historically state debt was mainly about war, since warfare and military expenditure overwhelmingly dominated state expenses. Attempts to tie postwar US debt to military expenditure is, however, nonsense on stilts. Debt is borrowing to spend and is driven by whatever the borrower spends money on and in no modern developed state, not even in the US, is military expenditure (whose share of GDP and government expenditure has been trending downwards across the postwar era) remotely the dominant form of government expenditure.

Graeber's factual unreliability is particularly unfortunate, as he has some fascinating ideas about various historical phenomena and trends -- I was particularly struck by his discussion of what makes an age medieval. But when Graeber makes silly statements such as:

Again, non-state bureaucracies are a phenomenon that no economic model would even have anticipated existing. It’s off the map of economic theory.

he is promoting nonsense -- modern economics finds such things so not-outside its purview, it has awarded Nobel Prizes for work in precisely that.

Unfortunately, there seems to be at least as great a tendency for anthropologists to make dubious statements about mainstream economics as there is for economists to be cavalier about anthropological evidence. Though some economists can join the former game quite happily. For example, in a survey lecture-cum-article on different approaches to money in historical context, economist Michael Hudson tells us that

Douglass North (1984) sees money as having been developed by enterprising merchants seeking a stable measure of value as well as a convenient means of payment. ...
One of the stated reasons for awarding the Nobel Economics Prize to North was his idea that money was developed not by public institutions, but by individuals to grease the wheels of commerce.

Yet there is no mention of money in North's Nobel citation, nor in his Nobel lecture, nor in the article Hudson cites while North's magnum opus has no citation for 'money' in its index.

But there is a wider polemical tussle underlying much of this.

M- or C-theory?
For the debate over Graeber's book is part of a long-standing debate that goes back to at least Georg Friedrich Knapp's The State Theory of Money (pdf) originally published in 1905. (Knapp seemed to have thought that analysis meant multiplication of definitions; his book produces a continual stream of them to the point that following the analysis becomes quite difficult.) Within the Anglosphere, the credit or chartallist theory of money was famously stated by Alfred Mitchell-Innes in two articles published in 1913 and 1914. This stream of thought led to modern monetary theory (MMT). In the chartallist approach, money is seen fundamentally as a creation of the state. This is what economist Charles Goodhart called in a 1998 paper (pdf) the C-theory, one of the two concepts of money.

The alternative is what Goodhart calls M-theory, which sees money as developing out of the needs of exchange. This is very much the dominant mainstream economics approach.  Optimum Currency Area (OCA) theory, for example, uses it. And while Goodhart is correct in that OCA theory is bad at explaining current boundaries of usage of particular currencies, the Eurozone crisis has proved to be eminently explicable in its terms. OCA may not be a good theory of currency realms (the ambit of particular currencies) but it is an excellent barometer by which to judge whether existing currency realms should amalgamate (or not).

As for the wider ideological game that is also being played out, if money is a natural product of exchange, then any state role in money is much more likely to be at best unnecessary and, at worst, pernicious. If, however, money is a natural product of state action, if the state has a necessary role in money, then such action is much more likely to be beneficent.

Thus, Hudson's lecture-cum-article displays a strikingly benign view of "the public sector". While taxes and soldiers get mentioned, the piece shows no serious sense of the expropriation and violence which is at the heart of the history of rulership and the state; in his comments on contemporary policy, there is little sense of issues about the inefficiency of fiscal stimulus, or its impotence if monetary authority does not give it space; little sense of government monetary dysfunction or issues about expenditure rises. Ibn Khaldun's C14th writings have a far better, mostly due to being far more balanced, sense of rulership.

Graeber is not quite playing the same game (his target is debt and state action supporting the same). Nevertheless, while Graeber's portrayal of slaves-money-debt Axial Age empires is extremely hostile (he extends the Axial Age to 600AD), his treatment of ancient Mesopotamian temple and palace complexes is remarkably benign, as is his depiction of medieval manorialism and village economies. He treats the collapse of the Western Roman Empire as overwhelmingly positive, with little sense of the demographic collapse or the loss of comfort which attended it.

On a much less ideological note, part of the problem is that money provokes two different sorts of questions. One is concern for its swap value -- inflation, deflation, use in money offers, the way demand is expressed in a monetised economy. The sorts of questions mainstream economics is mainly interested in.
The other sort of question is how come money has transaction utility at all, why do currency realms exist, what determines the boundaries of currency realms? Boundaries not only in the sense of which money is used in which exchanges, but also whether or how money is used. Consider that family-and-friends barbecue; it is embedded in networks of much more formalised and impersonal exchanges. Such formalised and impersonal exchanges are typically how you treat strangers and other people with low levels of personal connection with you.  Which is why we get offended if people start treating highly informal and personal interactions in ways which imply that they were as if with strangers.

So, there is a certain amount of talking past one another expressed in Goodhart's "two concepts of money", in M-theory and C-theory. Anthropologist Keith Hart expressed the hope that analysis might cope with both sides of the coin -- its manifestation as state power and its use in exchange. But, as he has since pointed out, there is some resistance to such.

Graeber approvingly cites Hart's original "Heads or Tails" essay in his book, and then manifests precisely the sort of one-sided aversion Hart was appealing to folk to get beyond.  There have been attempts to provide some sort of synthesis (such as this recent paper) (via). But the focus on different questions, and the wish to get answers which support wider concerns, means that this recurring fight over money shows no signs of abating.

(Cross-posted at Skepticlawyer and at Critical Thinking Applied.)

They did it again

One of my basic analytical principles is that things reveal their nature in history (including the history that has not happened yet -- that is, what has happened is not the sum of possibilities). If one wishes to understand current events, then cultivate a sense of history for the past is the cause of the present and the beginning of the future.

So, it was both revealing and depressing to read Jorg Bibow's 2003 paper On the 'Burden' of German Unification (also here) (via). Revealing, because the paper shows how destructive the Bundesbank's monetary rectitude could be; depressing because Bibow's analysis of events during the decade before the publication of his paper provides such a depressingly consistent template for events 6 or so years after the publication of the paper.

The unification of West and East Germany in 1991 was the absorption of East Germany by the Federal Republic. Since the infrastructure, technology, firms and level of marketable skills of the East were at a significantly lower level than that of the West, the costs of unification for the German Federal budget were considerable.

Which led to a significant increase in the Federal budget deficit. This, the Bundesbank disapproved of because of its potential inflationary implications. So, the Bundesbank engaged in restrictive monetary policy and public pressure to get the fiscal deficit back down. Which led to the German Federal Government raising taxes to improve the fiscal balance because of Bundesbank pressure while the Bundesbank's monetary policy led to a lowering in economic activity which acted to decrease government revenues and increase government expenditure (i.e. tended to increase the budget deficit).

This became completely farcical when the Bundesbank contracted monetary policy to counteract the effect on the price level of the tax rises it had pressured to occur. That is, the German Federal Government raised taxes to increase revenue only to have the Bundesbank engage in restrictive monetary policy to counteract the price impact of said tax increases thereby effectively negating any effect of the same on the budget balance. So the budget deficit did not improve significantly, but economic activity was below its previous trend.
It was a complete failure of policy coordination.

The Bundesbank did manage to push the German economy onto a lower economic growth path. What an achievement for monetary rectitude.

Once more, with feeling
Fast forward 10 or so years. The Eurozone has been created, with the European Central Bank (ECB) being basically the Bundesbank on steroids. In the words of political scientist Walter Russel Mead, it has become the world's first sovereign central bank. The point of the Euro, apart from achieving "ever closer union", was a Deutschmark for everyone.

Which meant that, until recently, the Bundesbank was calling the shots within the ECB. Which meant doing, in the name of monetary rectitude, deeply stupid things such as including tax increases in the inflation target, with the result that the ECB is not reaching its inflation target, it is systematically undershooting it. Worse, when Eurozone government raise taxes (!!!!) during a prolonged economic downturn to reduce their fiscal deficits, the ECB engages in restrictive monetary policy to counteract the "inflationary" effect of such tax increases, thereby driving down economic activity, so spending, so income, so government revenues and driving up government expenditure.

In other words, just like the Bundesbank in 1992-7, the ECB completely undermines the efforts of Eurozone Governments to reduce their fiscal deficits. All in the name of "price stability".

And doing so while not even managing competent inflation targeting, as the results show.

But the problem is not merely that the ECB has been negating, or worse than negating, any economic stimulus effect from the budgetary deficits. Nor is it even that it undermines the attempts of Eurozone governments to reduce their budget deficits by its monetary austerity.

It is worse than that; its restrictive monetary policies have made their public debt levels much worse. Which has both stressed the European financial system and further undermined the ability to reduce budget deficits (by increasing the cost of servicing public debts.)

If income crashes, one's debt burden gets worse. This is elementary.

If income increases, one's existing debt burden lessens. Which is the classic way to deal with public debt (apart from some form of default) -- to grow one's way out of problems, as outlined in Evsey Domar's 1944 article. As the economy increases, the existing public debt burden lessens.

But if, in the name of "price stability", the central bank engages in restrictive monetary policies to block any surge in activity that "threatens" the inflation target, then that route is blocked.

It is truly astonishing, how apparently indifferent so many "hard money" advocates are to the level of risk to the financial system they are apparently willing to tolerate to block any danger that inflation might get to the dizzying heights of, say, 4%pa. But, of course, we have also been here before. Adherents of the gold standard in 1928-32 were willing to sacrifice both price stability and the financial system to the sacred doctrine of gold. It is as if money stops being a tool for transactions and becomes some sacred principle to which all else must be sacrificed at whatever cost.


As for regarding increases in the monetary base as an example of "loose" monetary policy presaging some inflationary, or even hyperinflationary breakout, the history of the US monetary base in the interwar period shows what nonsense that is.

More recently, the evidence is that ECB President Mario Draghi has decided that monetary union is not, in fact, a suicide pact. While US Federal Reserve's statement of open-ended asset purchases to get unemployment down is a sign that even the Fed has decided that there is a limit to the economic misery to be imposed in the cause of ostentatious monetary rectitude.

The good news is that the Fed has decided to have something like a clear and open target and has apparently accepted that expectations about spending matter as well as those about price stability.

Monetary turnover ("velocity")

Old-style Monetarism relied on the assumption that monetary turnover (how quickly money moves through transactions, what economists call 'velocity'; a very confusing usage to those of us for whom high school Science took a little too strongly) was basically stable. This turned out not to be true. Which turns the focus on expectations, since they drive behaviour -- including whether people hold onto money or spend it. The more insecure people are in their expectations of income, the more they tend to hoard money rather than spend it, and the more the turnover ("velocity") of money drops.

In extremis, this can lead to a severe fall in monetary turnover, so a crash in transactions.
So, expectations about price stability matter, but so do expectations about income (i.e. spending). (Which is why Australia has not had a recession for 21 years; because Reserve Bank of Australia policy manages both price and spending expectations.) It is good that the Fed (and to a lesser extent the ECB) are beginning to get with the program.

What is less good is that the Fed is targeting a "real" (i.e. non-monetary) variable, unemployment. Central banks have great power over monetary matters (price level, spending, etc). They have much less over non-monetary matters. As several econbloggers have pointed out, using monetary instruments to keep employment up and unemployment down is precisely what lead to the "Great Inflation" of the 1970s.

Prominent econblogger Scott Sumner's comments about the limited understanding of so many central bankers appear to be not less than the truth.

Note for non-economist readers:Nominal GDP = GDP in money terms = NGDP = aggregate demand = Price level (P) times output (y) = Py.

[Cross-posted at Skepticlawyer and at Critical Thinking Applied.]

Can we have an intelligent debate about Islam?

My recent post about "green on blue" killings in Afghanistan provoked the sort of comments that indicate we have, in the modern West, a real problem having an intelligent conversation about Islam. Not the to-and-fro about the geo-strategic issues regarding Afghanistan, but comments about beliefs within Islam and their possible consequences.

The sort of comments which indicate this are the "yes, but in the history of Christianity ..." comments and the "don't be so nasty about Muslims" comments which are pretty standard responses when Islam and Islamic belief is discussed.

Conspicuous about both types of responses is that the reverse is almost never applied. Critiques of Christianity or varieties thereof (such as the role of Christian conservatism in US politics and culture) are almost never confronted with the "but in Islam ..." response. It is as if Christians are Real People, so are expected to take any criticism on the chin, but Muslims are Morally Protected Personages, so one has to bend over backwards to make it clear that one is not singling out Islam and Muslims.

Similarly, criticisms of Christianity, or political manifestations of Christianity (such as the role of Christian conservatism in US politics and culture) are almost never confronted with "but don't be so nasty about Christians" responses. Once again, it is as if Christians are Real People, and so have to wear any negative implications of their belief systems, but Muslims are a Morally Protected Personages, so criticism which might in any way imply anything bad about Muslims is not permissible.

Ideas and consequences
Folks, ideas have consequences. It does not matter if the believers of particular ideas are white, black, brown or brindle; ideas have consequences. It is perfectly legitimate to explore those ideas and their possible (or demonstrable) consequences.

There are, of course, many complexities in this. One of which is not every believer buys into every set of ideas associated with their religion. Even if they do accept particular ideas or doctrines, the extent that they do in practice can vary wildly. Perhaps part of the problem is we are more culturally familiar with Christianity and so are much more aware of the reality of that among Christians.

So, the issue about the doctrine of taqiyya or permitted deception is not whether Muslims are trustworthy as some personal characteristic. The issue is about religiously-sanctioned opting out of some basic norms of social life.

Just as the issue about high-trust and low-trust societies is not about whether individual members of such societies are good or bad people, it is whether social dynamics are such that trust is such a precious commodity that it is applied extremely narrowly. One of the basic reasons for Western success is that Western societies evolved to be high-trust societies (and the more high trust, the generally more successful). One of the issues with large-scale migration is that it does seem to lower the trust level; likely largely because of lower levels of mutual knowledge and fewer common preferences or shared signals.

Discouraging history
As for the "yes, but in the history of Christianity ..."  response, I completely fail to see how it is reassuring. In the history of Christianity, thousands of people were burnt or hanged as witches, millions of people were killed or starved to death in religious strife precisely because people took the reigning doctrines of their religion very seriously. The obvious spectacle of Muslims willing to kill in large numbers in the name of their religion may well invoke aspects of Christian (or, for that matter, Jewish) history, but they are not reassuring aspects. Particularly given the technological possibilities of mass destruction in our era.


[Read the rest at Skepticlawyer.]

Making my inner medievalist smile

Came across this cartoon.


Made me chuckle.

Though it was not the longbow which made English armies so deadly at Crecy, Poitiers, Najera and Agincourt, it was that their command-and-control was considerably superior to their opponents (who outnumbered them in each of the aforementioned battles). An English army with the same weapons mix as in those four battles was decisively defeated by a smaller Scottish army at the Battle of Bannockburn because of lack of effective command-and-control.

Ambiguous victory

The war aim of the victorious North in the the War Between the States was simple -- that the Union not be divided. As Abraham Lincoln put it, the Union position was "We won't go out of the Union, and you shan't". The Northern victory was, indeed, the Union victory. Freeing the slaves was a natural outcome of that victory but was not the basic war aim.

The war aim of the Confederacy was to separate from the Union in order to preserve slavery, its "peculiar institution", an aim embedded directly in the Constitution of the Confederacy. It wished to preserve slavery because about a third of its wealth was tied up in slaves; preserving slavery would also stop freed slaves from becoming voting citizens and block freed slaves from competing for work as skilled or managerial labour. The last two aims united the interest of non-slaveowners with slaveowners.

This is why the "most whites did not own slaves" argument that the Civil War was not about slavery falls flat. No, they did not; but they still stood to lose substantially if the slaves were freed.

In the immediate aftermath of the Union victory, when Union forces occupied the defeated Southern states, voting blacks dominated the political process. But this situation rested on Union forces enforcing equal protection of the law. With the end of the Reconstruction Era, the withdrawal of Union forces and the re-integration of the former Confederate States back into the Union, white power reasserted itself. This was the era of Jim Crow, where the two subsidiary aims in preserving slavery -- to block freed slaves (and their descendants) from having  voting power and competing for work as skilled or managerial labour -- reasserted themselves.

Of the three interests in creating the Confederacy -- preserving slavery, blocking black voting power, stopping blacks competing for skilled or managerial labour -- the first was lost in battle. Violence settled that issue most thoroughly. The second two were lost only temporarily, then re-asserted during Jim Crow era and only finally lost in the civil rights struggles of the 1950 and 1960s. That is when the underlying war aims of the Confederacy were finally defeated. (Not coincidentally, the defeat of the segregationist cause led to the economic resurgence of the South, as resources were no longer wasted in repression and blocking black talent.)

Elected (and re-elected) by the good ole boys (and girls).

The legacy of mass slavery reverberates down the years. Even today, the American South has distinctly lower levels of social capital than other parts of the US.

In the process, in their final defeat, the South came, after 130 years, to forgive the Republican Party for fighting the Civil War to Northern victory; a forgiveness consummated in the 1994 Republican Congressional victory. For a Democratic Administration -- the Kennedy-Johnson Administration -- supported the civil rights cause during its final legal victory. This use of federal power to profoundly undermine local patterns of power and status alienated many Southerners from the Democrats. First in Presidential elections and then in Congressional ones, the South increasingly voted Republican. The 2007 election of Bobbie Jindal as Republican Governor of Louisiana was both a symbol of how partisan alignments had been transformed and of how thoroughly the original Confederate cause was lost.

But also, of course, how long it took to be finally lost.

The surreal glitter of gold

Blogging at Free Banking, Kurt Schuler wants us to have a debate about gold (as in the gold standard).

Let's not.

I will concede that there is, as he states, much superficial dismissal of the utility of a adopting a gold standard. It is also true understanding the dynamics of gold, silver and bimetallist standards are a necessary part of understanding economic history; not merely for the periods when such standards applied but also for understanding what happened after and why. Such understanding requires a certain level of serious reading and thinking about gold, silver and bimetallism standards, if not quite the "necessary dozen books" Schuler specifies as required (though the list he puts up is an excellent one). Brian Selgin has recently made available a very useful paper on the history of the gold standard in the US.

The problem is the pointlessness of engaging in a "debate" when there is almost no chance of getting agreement about what that historical record tells us.

Take Austrian school economist Steve Horwitz's claim that

If we had a commodity-based free banking system, we would not have had the boom and bust of the 2000s in the first place.

Possibly not, though adding in free banking to a discussion of the gold standard rather muddies the issue. For, under the gold standard it certainly was possible to have a dramatic boom and bust; it was called the Great Depression.  Which makes Steve Horwitz's further claim:

that a gold standard ties the Fed’s hands is exactly the reason to favor it, not oppose it. The Fed was primarily, though not solely, responsible for getting us in this mess in the first place precisely because its hands were free to flood the market with artificially cheap credit.

somewhat less than persuasive. At this point it also becomes clear that no genuine debate will happen, for defenders of the gold standard will immediately claim against citing of said Great Depression "but that was not a real gold standard".

Which is true in the sense that the interwar gold standard was a gold exchange standard managed (or rather mismanaged) by central banks rather than the gold specie standard that had prevailed before the Great War.

For I am shiny and powerful

It was, however, certainly a form of gold standard and if such a disaster can happen under any sort of gold standard, so much worse for the gold standard. Particularly given that the quicker economies went off the gold standard, the quicker they recovered (pdf). Even more since the status of central banks would likely mean that only a gold exchange standard would even be considered for re-introduction.

Moreover, the reason the interwar gold standard was not a "pure" gold standard was that such a standard would likely have collapsed much more quickly. It was precisely the massive deflationary risks (of the ugly monetary contraction kind) attendant on going back on the gold standard after the Great War inflations, as Swedish economist Gustav Cassel repeatedly warned of (pdf),  that led to the various measures to reduce monetary demand for gold in the first place.

More broadly, the problems of 1928-32 were just the most intense example of a much wider problem with metal monetary standards -- the great vulnerability being on a gold, silver or bimetallist standard generates to the actions of other countries. Whether it is France abandoning bimetallism out of fear of (pdf) newly-unified Germany dumping silver onto international markets as it shifted to the gold standard or the UK being pushed into a lower rate of economic growth by expansion of the gold standard in the 1870s or countries in the goldzone being dragged into the (ugly) deflation (pdf) by the Bank of France and (pdf) the US Federal Reserve in 1929-32 or China being forced off the silver standard in the 1930s due to FDR's silver-buying program to placate silver-State US Senators driving up the price of silver, again and again being on metal-standard money has created grave vulnerability to the actions of other countries.

But none of this will count, because either the historical record will be disputed or some ideal version of the gold standard will be paraded which, by virtue of being wildly ahistorical (either in its take on the past or its sense of the present or both), will be immune to the burden of history.
Particularly if you add in free banking. But if one wants to have a debate about free banking, by all means lets -- the periodically truly appalling record of central banks certainly gives plenty of grounds for such a debate. Just don't mix it in with the gold standard as that distracts from attention to the performance of central banks.

The gold standard glitters so strongly in the minds of its adherents because you can always turn it around in such a way that all one gets is the bright shine of hope without any of the tarnish of history. For the gold standard of adherents is typically a thing of faith, not of history. One is then dealing with religious faith parading as economics and such faith is not subject to the refutation of mere worldly facts. So, let's not have yet another round of theological debate parading as economics.

Treachery Fire

The recent murder of 3 diggers by an Afghan wearing the uniform of the Afghan National Army is part of a pattern of murders of NATO and Allied personnel by Afghans who are either members of official Afghan security services or wearing the uniform of same.

In just the past two weeks, at least 9 Americans have been killed in such insider attacks. For the year to date, at least 40 NATO service members, most of them American, have been killed by either active members of the Afghan forces or attackers dressed in their uniforms — already outstripping the toll from all last year.

Obviously, these "insider killings" sew profound mistrust between NATO and Allied troops and Afghan forces.

Field commanders have also been given discretion to increase numbers of so-called "guardian angel" sentries who oversee foreign soldiers in crowded areas such as gyms and food halls, to respond to any rogue shooting incidents.

Not least because it undermines any sense that Afghans can be trusted to act according to the uniform they wear. Said uniform, and any associated oaths, clearly means much less to the treachery killers than that the NATO and Allied forces are "infidels". There is, for them, no overarching moral standard across the gulf between believer and non-believer.

There is also nothing new in the this pattern. The Dutch encountered exactly the same phenomenon during the Aceh War.

There was no shortage of would-be Acehnese martyrs who, for the sake of gaining a victim, were willing to feign friendship with the Dutch, before drawing their knives against them.  The phenomenon of unpredictable killings by the Acehnese came to be known as Atjèh-moord ‘Acehnese murder'.

The gulf between believer and non-believer trumped any explicit or implicit obligation.
It might be objected that the Dutch were colonising imperialists: which is true. Given that Afghanistan has an elected government and the NATO and Allied forces have no intention of staying permanently -- indeed, have an announced timetable of withdrawal -- that is hardly a common factor. Even more given that the Western intervention has seen a dramatic fall in the number of Afghan refugees, dramatic economic growth, expansion in schooling (particularly of girls and women) and elections (which, though imperfect, likely compare favourably to, say, Chicago under the Daley clan).


All of which may be much of the point.  Empowering women, giving folk effective votes that allow laws to be passed by mere humans, daily reminders of infidel success; these are profoundly affronting to a certain Islamic sensibility.

Patterns
Of course, what we are dealing with here is a pattern within Islam. Which does not make it a pattern of Islam. An important distinction that may be lost on grieving families, and comrades.


[Read the rest at Skepticlawyer.]

Venezia at the QVM

While walking near the Queen Victoria Markets (I had spent some time back in Melbourne, working near the Queen Victoria Markets, before it struck me that said Markets were at the junction of Queen and Victoria Streets) I saw this shop display.

Somehow, it seemed vaguely familiar.

Public knitting

Just next to Yarraville Station, an act of public knitting was recently committed.


I found it quite charming.

Why the noise?

I am a single person and--due to an upbringing starved of physical affection or praise interacting with unfortunate adult experiences (the former making the latter both more likely and more likely to be of a traumatic nature)--am likely to remain so. I also like cafes, perhaps more than I should, given my low income. (Yes, I am an employer who is also on a low income; more common than folk might imagine.)

So, when I go to a cafe, I often read and/or write. For a while, that meant taking along my laptop; now it means my iPad. (Which has a rather nifty keyboard connected by Bluetooth; I love the sheer inventiveness of the modern world.) Between Kindle for Mac, iBook and ReaddleDocs, I have lots of books, pdfs and other documents to read on said iPad. (Dropbox is a wonderful thing; as is Baen Books.) I also often take notes during my reading.

Hence, it is more than a little irritating when waiting staff interrupt to ask you if you want something. It is bad enough when you are reading, but if you are typing away, you really don't want to have your train of though interrupted or, worse, derailed. It is not as if I linger; I rarely spend much time after having consumed what I have ordered and, if I do, it will only be when there are clearly spare tables available. If I want something, I will attract attention. If I am typing away, or reading, I do not want to be interrupted by unnecessary interrogation.

That is, however, an occasional irritation. What is more omnipresent is the apparent requirement to have music playing in the background; often quite loud and with an intrusive beat.

Either people are at cafes with friends, and wish to talk. Or, like I usually am, they are on their own and wish to read or write. Either way, music is likely to get in the way if its loud or otherwise intrusive. Yet, that is often precisely what cafes inflict on paying customers.

It is not as if I dislike music. In the car, I listen to Joy FM in part because I (generally) like the music thereon. But silence, or the gentle hum of voices, can be refreshing too.

This was really brought home to me just recently. I have taken to sometimes patronising a new cafe in Yarraville which has a nice range of teas (I don't drink coffee, I find it stops me sleeping). Its name and tone invokes Eastern mindfulness.

So, there I was, with my peppermint green tea, typing away and the proprietor interrupts my typing to ask if I want anything. To which the answer was no. (I always answer politely; perhaps that is a mistake.) She then puts on music--the quiet had been particularly pleasant--a loud, bouncy pop song. This was not mindful nor encouragement to the same.

I realise that the modern world treats loud as a virtue music should aspire to. Having heard plenty of live music which was perfectly fine without any electronic sound enhancement (speakers and amplifiers do not invoke the right atmosphere at a medieval feast), making music loud because you can does not impress me.

Being loud may have some ritualised group effect when the music itself is the draw. But where it is supposed to be an additive enrichment of the overall service, then having it be intrusive is not a positive. Background music is supposed to be precisely that.

Trouble is, background music is sufficiently subordinate to issues of convenience, quality and price that it is not likely to affect decisions to patronise a cafe on its own. So, there is little selective pressure to weed out the noise.

Pity.