Class, repeat after me:Wilkinson adds:
People, ideas are public goods. That is the whole basis of new growth theory. If China is now doing cutting edge R&D, that is an unmitigated blessing for everyone on the planet.
- Green jobs are NOT a zero sum game where nations are competing for a fixed number of them.
- If China or Germany or anyone develops “innovative energy technology”, that is NOT bad for us. It is in fact *awesome* for us, as we can then adopt it and use it.
This is why it ought to be an embarrassment to exclaim in horror that the U.S. may be “falling behind” in the development of green technology. It is rather more illuminating to see government subsidies to research and the development of speculative technology as contributions to a collective global effort to explore the space of technological possibility.Commenter nickbacklash goes further:
The expected return to the average German taxpayer from German state science and technology subsidies is probably negative. But the global citizen’s expected return to global investment is probably positive. And the more others invest, the more positive the expected return is. If some Taiwanese firm makes an enormous breakthrough, everyone will get to internalize the benefit of this new technology. We just don’t know in advance if the Germans or the Taiwanese or the Canadians or the Americans or whoever will make the discovery.
This kind of global cooperation sounds nice, doesn’t it? But we know all about games like this, don’t we? If Canada, say, puts an end to all state subsidies for science and tech, this really won’t much affect the probability of a major efficiency-enhancing discovery somewhere or other. Which implies that the average Canadian taxpayer, now paying for no national R&D subsidies, would see her expected return from international R&D subsidies go up. (And the greater the extent to which subsidies tend to go to the best subsidy-seekers rather than to the best innovators, the less taxpayers should worry about the downside of withdrawing their state’s support from the global effort of discovery.)
As a general rule, if nothing bad will happen to you if you free ride, it’s smart to free ride. Worrying that other countries are pulling ahead is like worrying that the other oarsman in your boat will beat you to the destination if you’re lazy. You’re in the same boat! The smart thing is to goad everyone else into going as fast and hard as they can. For a good while now, America has been a dim kid with ape strength happy to carry half the world as long as he gets to fist-pump, flex his pecs, and chant U.S.A.! U.S.A.! in the mirror each night. It’s a darn good deal for the rest of the world. America’s just too dumb to feel exploited. And too idiotically vain to enjoy a free ride.
Worth noting though that, according to a fairly quietly released OECD study, state R&D subsidies don't make any net contribution to technological innovation, explained in this talk by Terence Kealey.
Science is not a standard public good. Not that this invalidates your wider point, there is just an even better reason for not [publicly] investing in R&D.
This is about the most effective presentation of data I've ever seen. I'm not even going to tell you the topic. It's just really, really good data presentation.
In response to your other reader emails requesting that you leave Sarah alone, let me say - don't leave her alone! I am currently living overseas in Sydney and let me tell you, she is the international face of the Republican party. Unlike parliamentary systems of government where there is a clear opposition leader, in the US there is no clear leader. So for whatever reason (I'll leave that analysis up to the experts) Sarah Palin has become the international de facto face of the opposition. No one in Sydney knows who John Boehner is. No one knows who Mitch McConnell is. Yes, they know John McCain, but he is old news. Whenever you read or hear a story down here about political opposition to any of Obama's policy initiatives it is always Sarah Palin that is quoted.Eeek!
Abandonment of "nation-building" exercises. Abolition of the federal Department of Education. A 1924-style immigration freeze. Repeal of No Child Left Behind. End of all federal subsidies to "community groups". End of all federal subsidies to arts and culture. End of all foreign-aid programmes that are not plainly and obviously bribes for pro-American behaviour. Restart construction of neutron bombs. Full-bore federal-subsidised research on missile defense. Withdrawal from the UN, followed by razing of all UN structures on American soil and sowing the ground with salt. How many d'you want?An immigration freeze? Crazy wrong-headed. The more open borders are, the better.
1. The pro-Western March 14 coalition won a clear victory in the Lebanese election, a promising step towards more enduring stability in that deeply-divided country.
2. The Iranian presidential election campaign has turned into a real dogfight between incumbent President Mahmoud Ahmadinejad and challenger Mir Hossein Mousavi. Although recent polls in Iran suggest that Ahmadinjed will still win, Mousavi seems to be gaining ground and there may well be a run-off. Even if Mousavi loses, there's clearly a lot of popular discontect with Ahmadinejad's rule, and a lot of it centers around his bizarrely self-defeating approach to foreign policy. [..] Moreover, there seems to be widespread popular support for improving relations with the United States.
3. The New York Times reports that some Pakistani villagers are turning against the Taliban, and may even be supporting the government's more active role against them.
It would be a mistake to give Barack all (or even most) of the credit for these developments, but I don't think its completely unrelated either.
[..] elections in most countries turn on local conditions and issues and not on what's happening in Washington. But it sure looks like Obama's approach is helping tip the scale in the right direction.
..the potential difficulty in suing foreign doctors appears to be the chief differentiator, and the primary argument in favor of good-old-American-surgery,” DrRich writes. “The surgeons, in essence, are saying, ‘Let us do your surgery, because we’re easier to sue if we screw up.’”
The Maunsell Sea Forts: Fortified towers built in the Thames and Mersey estuaries during the Second World War to help defend the United Kingdom. [google map] (© Jason Hawkes) #One such platform is now Sealand, a sovereign nation:
For the second time in a week, the Obama administration has discarded a major campaign pledge on international economic policy. In its decision last week not to name China a currency manipulator, and now to forswear renegotiation of NAFTA, the administration avoided two potentially costly mistakes.Greg Mankiw is delighted:
My biggest fear about international economic policy was that the President might actually follow through on his campaign rhetoric. So this news is a great relief.Original blame lies with the vagaries of Democrats' primary politics; Hillary Clinton was just as bad. I'm glad President Obama and his advisors are smarter than Candidate Obama and his base.
The overall "feeling" one gets from the Summit is that Latin American presidents are a bit taken aback – but pleasantly so – at what is a strange and new situation for them: a United States government that arrives at the meeting not to impose decrees or dictate other nation’s policies with blackmail tactics, but, rather, one that many have noted is really trying to listen and learn from its long neglected neighbors.
It’s a block association meeting, basically, one with a new community organizer in the neighborhood, and a very different approach to how things get done.
I can relate, as one who has been reporting on these regional meetings for a dozen years now. I’m almost too familiar with so many of the protagonists: Lula of Brazil, Chávez of Venezuela, Morales of Bolivia (who was a professor in the Narco News School of Authentic Journalism, class of ’04), Ortega of Nicaragua (whose 1985 inauguration I attended in Managua), and others like the narco-presidents Uribe of Colombia and Calderon of Mexico who have been the subject of years of investigative reports from this corner. I reported all of their elections. And each of them – including Obama of the USA – look like they feel a little out of place, but in a good way; like, who thought that a Summit of the Americas might ever be this fun and fearless all at once?
What is happening in Port of Spain is almost unrecognizable. It’s going to take some getting used to. But I don’t think there is a single participant or careful observer from any country in the hemisphere that isn’t pinching himself right now wondering, "can this really be happening?"
[This] problem is a function of a common information processing bias, of overestimating efficacy. In other words, you attribute a problem in the world to a presence or lack of direct human agency instead of to complex causal factors -- blaming executives getting too many bonuses as the cause of our latest economic problems is a good example of the efficacy bias (as if simply being less greedy would make the economy work better). It is a helpful bias, usually, though because it directs human efforts at what can be changed.
Military intervention is one thing that this fellow Collier, who I'm guessing (based loosely on reviews) wrote a better book than the lady you cite, argues for (see below). It's a bit too simplistic to see the "solution" as our needing to stop giving directly/having pity and focusing exclusively on macro "root" causes all of which are quite controversial (see The GiveWell Blog: The root causes of poverty). In fact, I think that we should continue to give, but to give more strategically. Better than relying on scattershot private charities as we currently do and as a dogmatic libertarian would suggest, (where people end up often as not giving to something disgusting like suburban soccer teams or music programs for elite suburban youth) would be a built in form on your tax return that you have to choose to OPT-OUT on that would contribute to the best reviewed charities in the world. Maybe even better, would simply be more government taxes going directly to defensible aid projects, AND macroeconomic strategies (which are controversial). Free trade as you welcomely suggest, is a no-brainer. However, some protectionism for those in the most poor billion (i.e., Africa) that are getting crushed by the cheap labor in Asia right now just for the time period for their businesses to start up might make good sense.
Here's a snippet of the Collier (who also sees problems with development aid) book review:
"Reflecting on the tendency of postconflict countries to lapse back into civil war, he argues trenchantly for occasional foreign interventions in failed states. What postconflict countries need, he says, is 10 years of peace enforced by an external military force. If that means infringing national sovereignty, so be it.
At a time when the idea of humanitarian intervention is selling at a considerable discount, this is a vital insight. (One recent finding by Collier and his associates, not reproduced here, is that until recently, former French colonies in Africa were less likely than other comparably poor countries to experience civil war. That was because the French effectively gave informal security guarantees to postindependence governments.) Collier concedes that his argument is bound to elicit accusations of neocolonialism from the usual suspects (not least Mugabe). Yet the case he makes for more rather than less intervention in chronically misgoverned poor countries is a powerful one. It is easy to forget, amid the ruins of Operation Iraqi Freedom, that effective intervention ended Sierra Leone’s civil war, while nonintervention condemned Rwanda to genocide." [As Collier says] “If Iraq is allowed to become another Somalia, with the cry ‘Never intervene,’ the consequences will be as bad as Rwanda.”
...he pins more hope on the growth of international law than on global policing. Perhaps the best help we can offer the bottom billion, he suggests, comes in the form of laws and charters: laws requiring Western banks to report deposits by kleptocrats, for example, or charters to regulate the exploitation of natural resources, to uphold media freedom and to prevent fiscal fraud.
...As Collier rightly says, it is time to dispense with the false dichotomies that bedevil the current debate on Africa: “ ‘Globalization will fix it’ versus ‘They need more protection,’ ‘They need more money’ versus ‘Aid feeds corruption,’ ‘They need democracy’ versus ‘They’re locked in ethnic hatreds,’ ‘Go back to empire’ versus ‘Respect their sovereignty,’ ‘Support their armed struggles’ versus ‘Prop up our allies.’ ”
[ NYT: The Least Among Us ]Heuristic is a good word for how I see libertarianism; more so than ideology. Libertarian principles are not a perfect answer to everything, but I've found them to be a very strong and effective heuristic.
I think utilitarian justifications (such as you claim in the earlier post) are always better than libertarian ones, even if libertarianism is a useful heuristic for a lot of helpful policies. It's just, it should be treated as a heuristic and not a moral principle otherwise it provides unneeded rationalization for the idea that we should just leave things alone and magic will happen.
Giving aid is good and highly defensible from a utilitarian stand point once you figure out where to give it, I think. See GiveWell.
Also potentially helpful, Brookings Global Economy and Development Conference: "What Works in Development? Thinking Big and Thinking Small” (.pdf)
You’re the President of America. At a NATO summit, a European reporter asks you whether you believe in American exceptionalism. How do you negotiate that fraught question without undermining the cooperation you hope to secure abroad, or else angering the folks back home? I’m sure I couldn’t have managed any better than this. It sure would’ve been easier to be president on a mission abroad before the advent of the television camera. I’d love for some historian to sift through the records of presidential visits, and the visits of envoys in the days before presidential travel, noting all the times words were spoken that never would’ve been said had they been transmitted to an American audience.
Despite a deluge of aid between the years of 1970 and 1998, poverty on the continent skyrocketed from 11 percent of the population to 66 percent, which means over six hundred million Africans are now impoverished.....Dambisa Moyo is a unique voice in the debate over African aid. In a conversation dominated by white, male westerners—and most conspicuously by celebrities such as Bono or Bob Geldoff—Moyo is a black, African woman....Moyo earned her master’s from Harvard and a Ph.D. in Economics at Oxford. She’s worked as a consultant to the World Bank, and for the past eight years was the sub-Saharan economic expert for Goldman Sachs. It was at Goldman Sachs that Moyo began work on her book, Dead Aid: Why Aid is Not Working and How There is A Better Way for Africa, just a few weeks ago
[...] Systematic western aid, Moyo argues in Dead Aid, has essentially turned Africa into one giant welfare state. The unending stream of money has created a situation where governments aren’t accountable to their citizens: since they don’t depend on tax revenue, leaders don’t think they owe their people anything—and the people don’t expect anything from their leaders. Moreover, says Moyo, since the money flows virtually no matter what, tyrants like Robert Mugabe of Zimbabwe (three hundred million dollars in foreign aid was sent to Mugabe in 2006 alone, says Moyo) often pilfer it and buy foreign goods, or stow it in foreign bank accounts where it does nothing to help the country. Furthermore, aid stamps out entrepreneurship. Moyo offers the example of an African mosquito net maker. When aid arrives in the form of a hundred thousand mosquito nets, the net-maker is out of business, and one hundred and sixty people (employees and dependents) are now aid-dependent. This, she says, is not a sustainable model.
Read the whole thing. (ht reason)[...] I think it’s quite bizarre frankly, and slightly laughable, when I hear people say “Oh, the book is controversial.” My view is that it’s hardly controversial; it’s very obvious...I think we all know that aid is not working. That’s why in the book I draw on literature from organizations like the World Bank. It’s somewhat bizarre that all this evidence is out there [that aid doesn’t work], but somehow we just continue to push for more. Let’s take the capitalistic system for a second. It’s quote, unquote, not working now. We have centuries of evidence that it generates wealth and delivers jobs, and yet here we are after one bad year and we’re ready to throw the baby out with the bathwater. So I find it quite worrying that we can look at aid—after sixty years and one trillion dollars that haven’t worked in Africa—and we still don’t question the system....
[...] I went to Kenya for the first time and visited the largest slum in Africa. It’s got about 1.2 million people living in it, and it’s been there since 1918. Frankly, it’s a perfect representation of the aid model. The UN for Habitat is right next door, yet this slum is spiraling out of control. It’s got no clean running water; it’s got nothing. It’s a direct example where they could have gone in and shown that aid works, but the slum is still there....In my experience—growing up in Africa and being an academic who went back to the continent and whose family still lives there—I have seen no evidence that aid is delivering a foundation that could ensure long-term sustainable growth and alleviate poverty
[...] I think the whole aid model is couched in pity. I don’t want to cast aspersions as to where that pity comes from. But I do think it’s based on pity because based on logic and evidence, it is very clear that aid does not work. And yet if you speak to some of the biggest supporters of aid, whether they are academics or policy makers or celebrities, their whole rationale for giving more aid to Africa is not couched in logic or evidence; it’s based largely on emotion and pity....
[...] having an open-ended commitment for long-term development and long-term aid is not acceptable. In sixty years, we’ve had over one trillion dollars in aid go to Africa. It needs to stop. So if somebody comes to me and says, “Listen, we think that your five-year program is a bit aggressive, why don’t we make it ten years?” I’m up for a debate on that. What I don’t want is for people to say “Oh, her book is so controversial,” and then they put it aside and continue to perpetuate a long-term, open-ended cycle of aid. I don’t want to raise my children on a continent that continues to spiral downward
[...] There is an incentive structure for the donors, and African countries know this. They know that the World Bank can only survive if it’s spending money. So when the conditionalities are not met, the aid continues to flow anyway....The World Bank discouraged Ghana from going to the capital markets to raise money because it wanted to keep the aid flowing. We’ve seen situations where, in order to keep the system going, the World Bank has lent to countries just so they could pay off old debts. A friend of mine had a great quote: “Africa is to the development industry what Mars is to NASA.” NASA spends billions on a MARS project, but they don’t really think we’re going there. Same with aid. Billions are spent, but no one really thinks it’s going to develop Africa. It’s kind of a scam.
Who could have predicted welfare for countries is as harmful as that for corporations and people?Dambisa Moyo, an African economist, has joined her voice to the other African economists [e.g. James Shikwati] calling for a full halt to Western aid. Her book is called Dead Aid and it asserts a direct cause-and-effect relationship between $1 trillion of aid and the rise in African poverty rates from 11% to 66%.
Though it's an easy enough signal to fake, I find it noteworthy that Moyo - in this interview at least - repeatedly pleads for some attention to "logic and evidence":
"I think the whole aid model is couched in pity. I don’t want to cast aspersions as to where that pity comes from. But I do think it’s based on pity because based on logic and evidence, it is very clear that aid does not work. And yet if you speak to some of the biggest supporters of aid, whether they are academics or policy makers or celebrities, their whole rationale for giving more aid to Africa is not couched in logic or evidence; it’s based largely on emotion and pity."
I was just trying to think of when was the last time I heard a Western politician - or even a mainstream Western economist in any public venue - draw an outright battle line between logic and pity. Oh, there are plenty of demagogues who claim the evidence is on their side, but they won't be so outright condemning of emotion - it's not a winning tactic. Even I avoid drawing a battle line so stark.
Moyo says she's gotten a better reception in Africa than in the West. Maybe you need to see your whole continent wrecked by emotion and pity before "logic and evidence" start to sound appealing.
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