Category: History
On the Hayek-Pinochet connection
Corey Robin has a long post on this, here is one part:
Hayek complied with the dictator’s request. He had his secretary send a draft of what eventually became chapter 17—“A Model Constitution”—of the third volume of Law, Legislation and Liberty. That chapter includes a section on “Emergency Powers,” which defends temporary dictatorships when “the long-run preservation” of a free society is threatened. “Long run” is an elastic phrase, and by free society Hayek doesn’t mean liberal democracy. He has something more particular and peculiar in mind: “that the coercive powers of government are restricted to the enforcement of universal rules of just conduct, and cannot be used for the achievement of particular purposes.” That last phrase is doing a lot of the work here: Hayek believed, for example, that the effort to secure a specific distribution of wealth constituted the pursuit of a particular purpose. So the threats to a free society might not simply come from international or civil war. Nor must they be imminent. As other parts of the text make clear, those threats could just as likely come from creeping social democracy at home. If the visions of Gunnar Myrdal and John Kenneth Galbraith were realized, Hayek writes, it would produce “a wholly rigid economic structure which…only the force of some dictatorial power could break.”
Hayek came away from Chile convinced that an international propaganda campaign had been unfairly waged against the Pinochet regime (and made explicit comparison to the campaign being waged against South Africa’s apartheid regime). He set about to counter that campaign.
He immediately wrote a report lambasting human rights critics of the regime and sought to have it published in the Frankfurter Allgemeine Zeitung. The editor of this market-friendly newspaper refused, fearing that it would brand Hayek as “a second Chile-Strauss.” (Franz Josef Strauss was a right-wing German politician who had visited Chile in 1977 and met with Pinochet. His views were roundly repudiated by both the Social Democrats and the Christian Democrats in Germany.) Hayek was incensed. He broke off all relations with the paper, explaining that if Strauss had indeed been “attacked for his support for Chile he deserves to be congratulated for his courage.”
There is much more at the link.
On the prospects for emerging economy upward mobility
Angus has some thoughts, here is one bit:
In my own research with Norman Maynard (trans-dimensional Bayesian mixture modelling alert!!), we find that in the 1950s and 1960s and most of the 1970s, there were two distinct groups in the global distribution of cross-country income, and there was a high degree of mobility from the poor to the rich group. Since the second age of globalization began in the 1980s, a new distinct group of super-rich countries has formed, the gaps between the poor group and the richest group have grown, and inter-group upward mobility has become a rarity.
There is more at the link, where he serves up a triple yikes.
Emerging markets, hitting a wall
That is the title of my new New York Times column. Here is an excerpt:
The disconcerting truth is that the great “age of industrialization” may be behind us, a possibility that has been outlined most forcefully by the economist Dani Rodrik, who is leaving Harvard for Princeton next month. And evidence for this view is coming from at least four directions:
THE RISE OF AUTOMATION First, machines can perform more and more functions in manufacturing, and sometimes even in services. That makes it harder to compete via low wages.
Say you run a company in a developed nation and have been automating many of its processes. Because your total bill for employee wages would be low, why not choose the proximity and familiarity of investing in labor in or near your home country? This change would help the jobs picture in the United States and probably countries like Mexico, but could hurt many other lower-wage nations.
GLOBAL SUPPLY SOURCES Supply chains are now scattered across many countries. Think of the old development model as a nation, such as South Korea, trying to build a nearly complete domestic supply chain for its automobile and other industries. The newer model is more distributed, as reflected by the iPhone, with the bounty from the investment spread across many locations, including the Philippines, Taiwan and mainland China. As for cars, Thailand has courted automobile factories with success, but the parts usually come from outside the country and the benefits for the Thai economy are limited.
Richard Baldwin, professor of international economics at the Graduate Institute in Geneva, refers to the internationalization of the supply chain as “globalization’s second unbundling.” He sees the new world as one of “development enclaves,” in which parts of countries will stand out as advanced or wealthy, without fundamentally transforming the entire economy.
I end with the following:
In any case, we should be prepared for the possibility that, while Seoul now looks a fair amount like Los Angeles, perhaps La Paz, Accra and Dhaka will never look much like Seoul.
Traditional dress from the Gulf States, and its origins
This is from the latest book by Christopher M. Davidson, After the Sheikhs:
Another prominent mechanism for guarding and preserving the social base of national elites in the Gulf monarchies has been the adoption of a “national dress” code. There are significant variations across the region, with men and women in Oman, Saudi Arabia, and Kuwait wearing several different styles of garments, and with the younger generations in all six Gulf monarchies increasingly wearing western clothes during their leisure time. For the most part the older generations in all these countries, and most citizens — young and old — in the wealthiest of the Gulf monarchies tend to wear a fairly strict uniform of white thobes or dishdashas (men) or black abayas (women). Such quotidian sartorial choices allow the observer to differentiate instantly between a citizen and an expatriate, which helps the former to access the aforementioned privileges associated with citizenship and the concomitant elevated social status they bring. In those monarchies such as Qatar or the UAE where the material rewards of citizenship are the greatest and where the expatriate component of the total resident population is the highest, adherence to the dress code is most prevalent. As one recent study put it, “it is no mere fashion that leads all Qatar national men to wear their traditional thoh at all times…the emir and his government have perpetuated these neo-traditional myths of authenticity, allowing the creation of a citizen autocracy.” Certainly it is very important to note that this dress code is primarily a product of the oil era and the rentier state: although sometimes referred to as “traditional dress” or even “Islamic dress” by foreigners, the current national dress code in these Gulf monarchies has few roots in tradition or religion, with early pre-oil photographs from the region demonstrating that the indigenous populations once wore a variety of colours and styles.
As for the book as a whole, I don’t think the author makes a convincing case for his extremely pessimistic forecasts, but still it is an interesting read.
No One is Innocent
I broke the law yesterday and again today and I will probably break the law tomorrow. Don’t mistake me, I have done nothing wrong. I don’t even know what laws I have broken. Nevertheless, I am reasonably confident that I have broken some laws, rules, or regulations recently because its hard for anyone to live today without breaking the law. Doubt me? Have you ever thrown out some junk mail that came to your house but was addressed to someone else? That’s a violation of federal law punishable by up to 5 years in prison.
Harvey Silverglate argues that a typical American commits three felonies a day. I think that number is too high but it is easy to violate the law without intent or knowledge. Most crimes used to be based on the common law and ancient understandings of wrong (murder, assault, theft and so on) but today there are thousands of federal criminal laws that bear no relation to common law or common understanding. The WSJ illustrates:
Last September (2011), retired race-car champion Bobby Unser told a congressional hearing about his 1996 misdemeanor conviction for accidentally driving a snowmobile onto protected federal land, violating the Wilderness Act, while lost in a snowstorm. Though the judge gave him only a $75 fine, the 77-year-old racing legend got a criminal record.
Mr. Unser says he was charged after he went to authorities for help finding his abandoned snowmobile. “The criminal doesn’t usually call the police for help,” he says.
Or how about this:
In 2009, Mr. Anderson loaned his son some tools to dig for arrowheads near a favorite campground of theirs. Unfortunately, they were on federal land….
There is no evidence the Andersons intended to break the law, or even knew the law existed, according to court records and interviews. But the law, the Archaeological Resources Protection Act of 1979, doesn’t require criminal intent and makes it a felony punishable by up to two years in prison to attempt to take artifacts off federal land without a permit.
The Anderson’s didn’t even find any arrowheads but the attempt to find was punishable by imprisonment. Under statutes such as the Lacey Act one can even face criminal prosecution for violating the laws of another country. Ignorance of another country’s laws is no excuse.
If someone tracked you for a year are you confident that they would find no evidence of a crime? Remember, under the common law, mens rea, criminal intent, was a standard requirement for criminal prosecution but today that is typically no longer the case especially under federal criminal law .
Faced with the evidence of an non-intentional crime, most prosecutors, of course, would use their discretion and not threaten imprisonment. Evidence and discretion, however, are precisely the point. Today, no one is innocent and thus our freedom is maintained only by the high cost of evidence and the prosecutor’s discretion.
One of the responses to the revelations about the mass spying on Americans by the NSA and other agencies is “I have nothing to hide. What me worry?” I tweeted in response “If you have nothing to hide, you live a boring life.” More fundamentally, the NSA spying machine has reduced the cost of evidence so that today our freedom–or our independence–is to a large extent at the discretion of those in control of the panopticon.
Report from Bangalore, 2013
Okalipuram corporator Queen Elizabeth was granted anticipatory bail in a forgery case.
Allowing her bail plea, high court vacation judge AN Venugopala Gowda told her to surrender her passport before the trial court and execute a personal bond for Rs 50,000.
The corporator has to be available for interrogation as and when required on any day between 8am and 6pm and shouldn’t make attempts to induce or issue threat/promise to persons acquainted with the facts of the case, the judge said.
An FIR was registered against Queen Elizabeth under sections 198 and 420 of the IPC and section 3(1)(ix) of SC/ST(Prevention of Atrocities) Act, 1989, for allegedly forging documents and obtaining a false caste certificate.
The story is here, via James Crabtree, and yes the person’s name is Queen Elizabeth and she is on the city council.
Do Presidents become more interventionist once they take office?
Andrew Sullivan is upset with President Obama over Syria. I’d like to consider the background question of whether individuals, upon assuming the presidency, subsequently come to look more kindly on foreign intervention (and perhaps also surveillance?) than before holding office. I can think of a few reasons why this might occur:
1. Presidents become used to holding power, and this makes them more statist, including more interventionist. It’s not that they wake up one morning as evil, but rather they must make many small compromises along the way, and since they are committed to holding good images of themselves, their moral views shift subtly over time to accommodate this positive self-image. Many libertarians favor this kind of explanation.
2. Presidents learn the actual truth about the international situation, and becoming more interventionist is a rational implication of Bayesian updating. Many Presidents favor this kind of of explanation.
3. Presidents must live with a great sense of responsibility for their decisions, and this makes them more utilitarian and less deontological. Arguably the same is true of CEOs of major companies, and of the major characters in the new Superman movie. Superman seems willing to toss around infrastructure to increase his chance of taking out some bad guys, and none of the viewers in the Angelika Mosaic multiplex seemed to find this implausible or undesirable.
4. Presidents come to rely on the national security and defense establishment as an important part of their coalition, and this establishment is, for reasons of its own, often favorably predisposed to intervention, at least if done according to their self-imposed standards. There is a bit of trade going on here and also a bit of cognitive capture, but in any case presidents move closer to the views of their national security establishments over time.
5. Presidents, upon assuming office, become increasingly aware of what it takes to maintain America’s network of global alliances. For instance behind any Syria decision are a variety of pressures from the Gulf States, from Israel, from the Europeans, from ongoing push-and-shove with Russia, and so on. The President has a stronger sense of how inaction can lead to an unraveling of America’s credibility and previous agreements, both explicit and implicit. We are never playing from t = 0.
6. Presidents come to favor actions which correspond to them receiving a stronger place in history. In their second terms this is especially likely to involve foreign affairs.
Perhaps there is something to all of these hypotheses. Is there a way to describe them all under a common heading of what loses salience to an individual, once he or she becomes President of the United States? It doesn’t seem quite right to postulate “they forget about the little people.” So what is it then?
The follow-up question whether these are on the whole destructive biases, or are they useful counters to other, less cosmopolitan biases which otherwise favor too little intervention?
I sometimes wonder how much Presidents trust their own judgments.
Malcolm Gladwell on the new Albert Hirschman biography
It is an excellent overall review, here is one good excerpt of many:
“We may be dealing here with a general principle of action,” Hirschman wrote:
“Creativity always comes as a surprise to us; therefore we can never count on it and we dare not believe in it until it has happened. In other words, we would not consciously engage upon tasks whose success clearly requires that creativity be forthcoming. Hence, the only way in which we can bring our creative resources fully into play is by misjudging the nature of the task, by presenting it to ourselves as more routine, simple, undemanding of genuine creativity than it will turn out to be.”
And from there Hirschman’s analysis took flight. People don’t seek out challenges, he went on. They are “apt to take on and plunge into new tasks because of the erroneously presumed absence of a challenge—because the task looks easier and more manageable than it will turn out to be.” This was the Hiding Hand principle—a play on Adam Smith’s Invisible Hand. The entrepreneur takes risks but does not see himself as a risk-taker, because he operates under the useful delusion that what he’s attempting is not risky. Then, trapped in mid-mountain, people discover the truth—and, because it is too late to turn back, they’re forced to finish the job.
You can buy the book here.
India to send the world’s last telegram on July 14th
At the Bharat Sanchar Nigam Limited (BSNL), India‘s state-owned telecom company, a message emerges from a dot matrix printer addressing a soldier’s Army unit in Delhi. “GRANDMOTHER SERIOUS. 15 DAYS LEAVE EXTENSION,” it reads. It’s one of about 5,000 such missives still being sent every day by telegram – a format favored for its “sense of urgency and authenticity,” explains a BSNL official.
But the days of such communication are numbered: The world’s last telegram message will be sent somewhere in India on July 14.
That missive will come 144 years after Samuel Morse sent the first telegram in Washington, and seven years after Western Union shuttered its services in the United States. In India, telegraph services were introduced by William O’Shaughnessy, a British doctor and inventor who used a different code for the first time in 1850 to send a message.
The BSNL board, after dilly-dallying for two years, decided to shut down the service as it was no longer commercially viable.
“We were incurring losses of over $23 million a year because SMS and smartphones have rendered this service redundant,” Shamim Akhtar, general manager of BSNL’s telegraph services, told the Monitor.
And for a little bit of history:
At their peak in 1985, 60 million telegrams were being sent and received a year in India from 45,000 offices. Today, only 75 offices exist, though they are located in each of India’s 671 districts through franchises. And an industry that once employed 12,500 people, today has only 998 workers.
By the way:
Sixty-five percent of daily telegrams are sent by the government.
The full story is here, and the pointer is from Michael Clemens.
Dani Rodrik has been right all along
For a few years now Dani Rodrik has been tweeting about how second-rate, illegitimate, and undemocratic the current Turkish regime is. He never convinced me, not because I held firmly to some opposing perspective, but simply because I don’t follow Turkish politics closely enough for claims of any kind to have had traction on my views.
It now seems he has been quite clearly correct all along. The Turkish state has behaved very badly in response to recent protests and shown how deeply it is infected by many of the characteristics of autocratic and authoritarian regimes. The treatment of children, doctors, foreign and domestic journalists, the use of chemicals in the water cannon, the indiscriminate use of the riot police, and the generalized paranoid suspicion of the Turkish population — among other factors — all point in this direction. Democracy is about more than just elections.
Here is a short update on recent events. Here is a short piece on the not very impressive response of the Turkish media.
For some coverage of what is going on you can follow @memmetsimsek or Rodrik himself. Michael Clemens has connections to Turkey and he is also a useful source.
If nothing else, it can be forecast that the variance of possible outcomes for Turkey has gone up.
Sentences to ponder
While the ethics behind holograms of deceased celebrities might be questionable (in the words of a parody Twitter account called Aaliyah’s Ghost, “The best duets imo are the ones where both artists are alive & agreed to work together”), copyright permissions and objections from various estates, in addition to the high costs, have so far prevented “resurrections” from becoming a more widespread trend. For its closing ceremony, the London Olympics scrimped on costs, reviving Freddie Mercury for a duet with Jessie J by broadcasting his image on a flat screen rather than a hologram body. It is hard to imagine the Tupac hologram moving forward without permission from his mother Afeni Shakur. The Marilyn Monroe estate, on the other hand, contested plans for a “Virtual Marilyn” concert organised by Musion partner Digicon Media.
Here is more, from the always interesting Joanne McNeil.
Austrian markets in everything, rising inequality edition
An Austrian hotel is advertising for a modern-day court fool, who is communicative, extroverted, musical, creative and imaginative.
Applicants are asked to bring — and play — their musical instrument during the job interview. Also welcome: creative costumes. The successful candidate will earn 1,400 euros — around $1,900 — a month.
Hotel director Melanie Franke says those interested should not think they’re on a fool’s errand in applying. She says the idea is to treat guests like royalty, noting that “jesters were a luxury that royal families indulged themselves in.”
Here is a little bit more.
Robert Fogel has passed away
He was a Nobel Laureate and one of the greatest of economic historians. His Wikipedia page is here. He is here on scholar.google.com. Previous MR mentions and discussions are here. Here is one appreciation of Fogel. Here is a good NYT obituary.
*How Asia Works*
The author is Joe Studwell and the subtitle is Success and Failure in the World’s Most Dynamic Region. That’s an excessively bland title and subtitle, but so far this is perhaps my favorite economics book of the year. Quite simply, it is the best single treatment on what in Asian industrial policy worked or did not work, full of both analysis and specific detail, and covering southeast Asia in addition to the Asian tiger “winners.”
Studwell explains that South Korean policy was based in a notion of “export discipline” and that policymakers were quite ready to see leading chaebol go bankrupt, which indeed they did often. Everything was directed toward export capacity and they didn’t worry about what rate of price inflation, often in double digits, the cheap credit policies might create. It was a gamble on a world-historical scale, noting that South Korea engaged in much more borrowing than did the other Asian tigers. His p.111 account of how Park and his cronies started arresting most of the nation’s leading businessmen, to teach them a lesson and to skew corruption in nation-building directions, is sobering and thought-provoking reading.
Here is one instructive bit of many:
Thailand holds the record for the most consistent import substitution industrialisation (ISI) policy in south-east Asia, running from the early 1950s into the 1980s. Industrial policy also was led by probably the most competent, professional bureaucracy in the region. But, as the Japanese scholar of development Suchiro Akira observed, there was almost no pressure for favoured manufacturers to export…Unlike in northeast Asian states, the Thai bureaucracy never brought export discipline to bear because the Thai generals and politicians who ran the country did not prioritise it.
In other words, industrial policy has to work with the market and rely on market discipline, not try to circumvent such constraints. That is hard to pull off, although clearly it happened in South Korea.
It is also an excellent book on the agrarian pre-histories of East Asian industrialization and why South Korea, Japan, and Taiwan pulled off successful land reforms and Indonesia and the Philippines did not.
I would wish for more coverage of education and labor markets, and the final section on China still awaits me. Think of it as a kind of “tweener” book: too specific and analytic to be truly popular, too broad, historical, and anecdotal to count as formal economic research. That is not a complaint.
Definitely recommended, you will learn lots from it, and it will upset people of virtually all ideologies.
Addendum: Here is a good FT review.
Benjamin Britten at 100
I very much liked Neil Powell, Benjamin Britten: A Life for Music. Also very good is Paul Kildea, Benjamin Britten: A Life in the Twentieth Century. They are both also useful for understanding English intellectual life during the 20th century, most of all Auden but even Keynes and also the broader history of homosexuality in England. Both are already out in the UK, where I picked them up earlier in the year, and both will make my best of the year list in late November.
Here is a good Anthony Tommasini survey of Britten at 100. I will offer these bits
The Britten pieces you are most likely to enjoy: Serenade for Tenor, Horn, and Strings, that disc has Les Illuminations and Nocturne too and is the single best Britten disc to buy, and also A Ceremony of Carols.
The ones I think are best: Cello Symphony, Winter Words (song cycle), and perhaps Billy Budd. War Requiem. Nocturne is a powerful spare late work. I like Curlew River for its connection to Balinese music, although I would not put it among his best compositions from a strictly musical point of view.
My most significant Britten heresy: I’ve never enjoyed listening to Peter Grimes and I find most of the experience oppressive. More generally, for much of my life I never felt close to Britten’s music, as it made me crave Stravinsky and Mahler instead. But I’ve listened to it quite a bit since January and have enjoyed it more than expected.
Two points: I think he understood the English language better than any other major composer, and how he sets and understands a text is without parallel, in English at least. Furthermore as a conductor or pianist he is superb, try his Brandenburg Concerti or his piano on Schubert’s Winterreise, Peter Pears singing, among other works. Those are two of my favorite recordings in all of classical music.