Wednesday assorted links

1. Turn almost every object into a data storage unit?

2. China threatens Faroese prime minister.

3. The roots of eastern European backwardness.

4. Atif Mian on the economy of Pakistan (NYT, note that Mian commits the “Junker fallacy,” namely he argues that land speculation on net drains funds from business investment — a basic mistake in economics).

5. 98 percent of Bougainville votes for independence from Papua New Guinea.

Comments

4. Is the "mistake" assuming that speculation drains funds from business investment (i.e., productive capital) or is the "mistake" speculating? I know Cowen's answer (speculation, what speculation?), but I just thought I would bring attention to this issue that divides some economists from non-economists.

I would think that economists would look beyond the money involved in speculating and instead focus on the real resources involved. People who focus their time and energy on speculation are people who aren’t focusing their time and energy on R&D, managing existing businesses, etc. Of course there is always the argument about how capital markets provide liquidity and that makes the economy more efficient, yada yada.

What is the source of the "Junker fallacy" and its (correct) solution?

Thanks in advance

#5: I imagine the government of Indonesia is not at all happy about such a referendum taking place in a neighboring country.

Why? They have no territorial claim there, and they earlier allowed an independence referendum for East Timor.

Did you ever hear of West Papua? Now look at a map of Indonesia and find Java and see how far away the island is. The Javanese invaded after the Dutch left.

Bougainville is 1500 km away from West Papua. A bit more than the distance from London to Rome, a bit less than the distance between Berlin and Moscow.

A referendum that they allowed after decades of brutally suppressing the East Timorese independence movement and that they wrongfully thought they would handily win due to the years-long effort to dilute the East Timorese population with loyal West Timorese. Indonesia will not make that mistake again.

Territorial claims aren't really relevant. It's about a people's perceived rights. If West Papuans, for example, see their regional neighbors exercising a fundamental right like this, then they'll likely start demanding the same in greater numbers and volume.

The 2001 peace agreement mandated the holding of a referendum. It is an internal affair of Papua New Guinea. Is the Indonesian government on record as objecting to the holding of this referendum (after eighteen years' advance notice), or are you just speculating out loud?

Even though you ignored my response, I will address your question.

As I am not a member of the Indonesian government, I don't have inside knowledge of their true position on the issue. But it doesn't take inside knowledge to make educated assessments. I did also start my post with "I imagine...".

Indonesia's gives exactly zero f**ks about this.

sentence 1 - whataboutism

sentence 2 - whataboutism

sentence 3 - "treated like human" is not the same as "no scrutiny on shady dealings"

sentence 4 - that's not an internal affair

While it is true that the Saudi's chop the heads of those who protest, they don't round up a million plus religious minorities and "re-educate" them.

Are you talking about the country that forbids conversion from Islam and forbuds peop,e from openly practicing any other faith?

TIL that the plant Bougainvillea was named after an explorer who also has a namesake island off of Papua New Guinea. Interesting.

#3 Eastern Europe was subject to large scale invasion and smaller scale pillage and slave raiding off the steppe right down into the 17th century. That sort of thing ended after the Vikings and Magyars were Christianized in Western Europe, except for some very minor pirate raiding in the Mediterranean.

Yep, the authors could have spared themselves a lot of time by saying the biggest difference between the two parts of Europe can be essentially boiled down to mountain ranges (or in the case of the UK, the English Channel, though one should note that the Irish Sea did not help the Irish much).

Not just from the Asian steppes, but also from Muslim invasions from the south east.

And the southwest, but then, the Iberian Penisula has a number of mountains too.

No, they are not. I find contemptible the anti-Chinese hysteria that has become so fashionable nowadays. Is it not China who invades helpless countries and betrays its best friends for short term political gains.

Many countries that have had dealings with the Chinese disagree with you, in fact few seem to agree.

Well, many countries are shocked by the American's refime disregard by international law and proper behavior. They have noticed the Chinese government is much more eliable, responsible and honourable than the gangsterish Drumpf Admi istration.

"US has basically the strongest judiciary system of the world." I am sure the Iraqis, the Afghans and the political prisoners in Guantanamo are thrilled. So must be the Kurds, the Brazilians, the Argentinians and Mr. Khashoggi.

"US has basically the strongest judiciary system of the world." I am sure the Iraqis, the Afghans and the political prisoners in Guantanamo are thrilled. So must be the Kurds, the Brazilians, the Argentinians and Mr. Khashoggi.

#1. Some context may be useful. How out of the ordinary is a direct threat like this compared to the other methods countries use when promoting their companies - say Boeing or Airbus for instance.

"by indicating that the Chinese government would drop a free trade agreement with the Faroe Islands if the company did not get the contract."

Can we stop calling these "free" trade agreements?

Would "Trade Liberalization Agreement" satisfy you?

I'd prefer just Trade agreement. It's certainly not "free" trade and "Liberalization" ignores the secret quid pro quo requirements involved in the above link.

Would anything which factually states that said trade agreements reduce trade barriers satisfy you?

Trade modification agreement is probably most accurate. It simply modifies the terms of trade (and pray they do not modify them further).

Well that would be true for USMCA, certainly. So I suppose it's good that that agreement does NOT contain the word "Free".

"Would anything which factually states that said trade agreements reduce trade barriers satisfy you?"

How is a government mandate that Huwei be the sole supplier of 5G to the Faroe islands remotely a "reduction in trade barriers"?

Take your blinders off. Not all trade agreements are good and not all trade agreements are equal. The US currently has a dozen signed trade agreements. Most of them are almost certainly a net positive. But that doesn't mean that every trade agreement is automatically a net positive.

You're misstating the nature of China's demand. First, the demand was that Huawei get a contract to build 5G networks, not a n exclusive right to supply 5G. Second, there is a trade agreement, which reduces trade barriers on both sides - and China was threatening to revolk said agreement (i.e. punish it's own consumers along with Faroe's producers) if Huawei didn't get said contract. Presumably the trade agreement covers more goods and services than just telecom, so even if Faroe caved to the demand and gave Huawei such a contract, heck even IF the contract WAS for exclusive rights to provide 5G (which it is not), it still would be a net reduction in trade barriers.

" it still would be a net reduction in trade barriers."

Really? The Faroe islands already has an agreement with China. China is threatening to revoke it if they don't get the contract. That is not a "reduction in trade barriers".

"The Danish major newspaper Berlingske Tidende is reporting on a startling case in which the Chinese ambassador to Denmark, Feng Tie, is said to have directly threatened the top echelons of the Faroese government to secure a strategically important contract for Chinese telecom giant Huawei.
If the company did not get the contract, the Chinese government would drop a free trade agreement with the Faroe Islands, the newspaper reported."

https://salmonbusiness.com/china-puts-pressure-on-the-faroe-islands-salmon-export-free-trade-will-be-stopped-without-huawei-contract/

I'm shocked that a Libertarian could defend such an obviously cronyist deal pushed by secret threats.

This is basic mercantilism. It's not about free markets, it's about monopolizing markets to one nations advantage.

I'm not defending the concept of threatening the Faroese government in exchange for getting a contract. I'm defending the idea that the Free Trade Agreement that the Faroe Islands have with China is a "free" trade agreement.

In fact, you are contradicting yourself. You are now saying that *revoking* the free trade agreement would increase trade barriers, whereas before you claims that the free trade agreement wasn't really a free trade agreement. Either the trade agreement reduces trade barriers (in which case the word "free" applies), or it doesn't (in which case revoking it shouldn't make a difference). make up your mind.

Hazel, there's nothing contradictory about my posts. I've explicitly stated that they should just be called: "Trade agreements" or perhaps "Tariff reduction agreements" or "preferential trade agreements".

The Faroe islands had a trade agreement. The Chinese were threatening to revoke it. That was explicitly the context we've been talking about.

If the government lowered your tax rate from 20% to 15% would you refer to that as a "free income" agreement or would you just call it a tax reduction?

To be fair, I would classify the import/export taxation between US states to be a "free" trade agreement and also between EU members. Those are, generally speaking, 0% tariffs between members.

+1, It's an unexpected turn of events. New marching orders from whomever is funding him maybe?

Or maybe some people just oppose the American regime thugish behavior.

Come on, man. If somebody is "funding him" I hope they're paying in tic tacs or something. I think it's a lot more likely he's just some bored weirdo who does this whole multiple persona thing as a source of personal amusement for reasons that escape normal people.

"I think it's a lot more likely he's just some bored weirdo"

Oh that's what I've always thought, but his context has changed remarkably with-in the last month or so. Gone are the constant, "Brazil is a nation bigger than the Roman Empire" bragging comments and they've been replaced with an obvious anti-American slant.

"Leonard Hanson", "Thomas Davies", "Reginald Jones", "Jerry Logan"

the son of a china government official is doing part time extracurricular activities to build CV. well done kid

note that Mian commits the “Junker fallacy,” namely he argues that land speculation on net drains funds from business investment — a basic mistake in economics)
---

speculators increase the number of traders who prefer empty lots to lots with buildings. If you increase the aggregate preference for empty lots you will have slightly more empty lots and slightly fewer buildings. Supply and demand, chapter one.

Yes, credit and futures matter but it is not a fallacy when there is a greater preference for empty lots, you get more of them. You are not displacing current consumption for future or different consumption, you are trading current consumption for current empty lots.

Thanks.

So the fact is that resource allocation responds to changes in preferences. The fallacy consists in believing that this new allocation is inefficient. Is that all?

Do you know why Tyler Cowen calls this the Junker fallacy?

Stéphane

4. There in no junker fallacy or at-least the impact of speculation on real economy is significant. (a) Too many are employed in land speculation business - broker and all doing nothing productive. There are areas around Delhi where every other shop is of real estate broker. (b) Lump sum money which could have been invested instead goes for consumption. Speculation does not suck money, but many a times land is sold when money is needed. So it converts savings back into consumption rather than investment.

#1: The science fiction possibilities here are enormous. (Or has some writer already written about this?) One downside that the Star Wars and Harry Potter stories have always had for me is the notion that some kid in the galaxy just happens to be the Chosen One because he happened to be born with the right genes or ancestry or midchlorians or whatever they're called. It's rule by the divine right of kings or knights or wizards.

But with this DNA stuff, some kid actually could be born with say the blueprint for the Millennium Falcon or whatever, and the future of the galaxy might depend on their fate.

Or maybe, in the manner of a Stephen King story, there's a whole group of kids who have occasional reunions because of a shared something, but they're not sure exactly what it is. And it turns out that each of them has some of the Millennium Falcon's blueprint in their DNA, and some have the navigational knowledge from that android that got uploaded into the Falcon's computer, etc. etc.

Are they really? I can already store the whole human genome a thousand times over on a microSD card that I can buy on Amazon. It's a whole lot easier and faster and less error prone to read out. DNA computing has always struck me as a silly solution looking for a problem to solve.

The point is the ability to both conceal and transport the information. If I try to smuggle a microSD card on the next shuttle to Alpha Centauri, the SpaceTSA or Empire or whoever will find it. Or maybe they've confiscated all of my possessions.

But if the information is hidden in my DNA, I can slip through.

If the SpaceTSA takes saliva or hair samples, they will find nothing because ... I don't know, the Rebels' genetic engineers have figured out how to make my body edit the extra DNA out of all of my cells except the ones in my upper left incisor.

And the other feature of DNA that a mechanical device can't match is literal inheritance. I.e. the designated messengers pass the information on to their children, automatically. So e.g. the blueprint for the Millennium Falcon can be concealed for generations until the day when Rey or that kid with the broom arises and is ready to lead a new rebel uprising.

Or maybe the Essenes or Crypto-Jews or Tibetan Buddhists of the future want to save their religious texts from the book-burning authorities. And make sure that those texts will be around for generations. Even today it can be hard to extract electronic data that are stored on obsolete media, old floppy disks or tape reels or whatever. With DNA, one still needs to have the technology to read DNA and remember the codes but at least the hardware will not go away.

Suppose the marginal propensity to save goes down as wealth goes up. I think in that case, the Junker fallacy would not be a fallacy.

If the roots of elite numeracy are reduced violence, what does that say about the long term prospects of the Americas, which are considerably more violent than the 'old world'?

#5. Map is unhelpful and misleading.

Yes. It took me several minutes of googling to figure out what the map is trying to say. I'm guessing that the editors recycled that map from an older article about three separate islands (or parts of islands) that are seeking independence from three separate countries: Bougainville from Papua New Guinea; Chuuk from the Federated States of Micronesia; and West Papua from Indonesia.

That's what the map shows, and does a semi-reasonable job of illustrating (it doesn't show the countries but it does correctly highlight the separatist islands).

But that map is useless for describing what's going on between Bougainville and Papua New Guinea, which is the non-highlighted eastern part of the island.

Re-cycling an irrelevant or misleading map is bad enough but is worse in this situation where words such as "Papua" and "West Papua" can not only mean different things ("Papua" might mean the whole island of New Guinea, or the western region that we might call Western New Guinea, or a province in that western region that is indeed called Papua) but can have political connotations too (Indonesia might call that region "Papua" whereas independence activists might call it "West Papua", all of this is according to wikipedia).

So yeah, they needed to create a map with the correct areas highlighted instead of using that irrelevant and misleading one.

2. Doesn’t seem so different from Trump conditioning a trade deal with China on Chinese purchases from private American agricultural interests.

One was a public condition the other was intentionally private. There's a vast difference between public bargaining and behind the scenes deals.

Ok, so it's OK to be a merchantilist as long as you are open about it, then?
Merchantilists everywhere, come out of the closet. No need to even *pretend* to be free traders.

By that standard, NAFTA is a merchantilist trade agreement. Have you been openly critical of people supporting NAFTA?

"The (NAFTA) Canada–U.S. agreement contains significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products), "

Also, the US insisted upon stricter copyright protections as part of the NAFTA Chapter 17 agreement.

"Canada had to make changes to both the Copyright Act and the Trademarks Act to reach the NAFTA’s minimum standards. "

5. Preliminary projections indicate the British Conservatives and the Ulster Unionists may end up with a 100 seat plurality over the other parties. Here's hoping BoJo puts the pedal to the metal.

Comments for this post are closed