Category: Political Science
Singapore facts of the day, shareholder state edition
The government (through holding company Temasek) has a minority stake in DBS Bank which is the largest company on the Singapore Exchange. The government has a majority stake in the two largest telecom companies: Singtel and Starhub, it has a majority stake in the flag carrier Singapore Airlines and it is the owner of CapitaLand (the largest real estate company in Singapore).
Out of the 25 largest companies listed on the Singapore Exchange (as of 26th June 2023, excluding real estate investment trusts) 9 companies were started by the government. It still maintains at least a minority stake in all of them and a majority stake in Singapore Airlines and ST Engineering. For most of them, it is still the largest shareholder.
Singapore’s Government Linked Companies do not appear to get any special advantages according to this 2003 study, and some of them – like SIA, Singtel, DBS and Keppel – have achieved success out of the home market.
Along with this, the government of Singapore owns the vast majority of land in Singapore. I’m not sure of the exact number (this 2021 article says over 80% while this OECD site says 90% without citing it), but it is likely to be above 80 or 90%. Nearly 80% of Singaporeans live in government built housing.
Here is more from Pradyumna Prasad, mostly about how to construct freedom indices properly.
+1 For the Veil of Ignorance
From a new paper in Cognitive Science:
Most people in the United States agree they want some income inequality but debate exactly how much is fair. High-status people generally prefer more inequality than low-status individuals. Here we examine how much preferences for inequality are (or are not) driven by self-interest. Past work has generally investigated this idea in two ways: The first is by stratifying preferences by income, and the second is by randomly assigning financial status within lab-constructed scenarios. In this paper, we develop a method that combines both experimental control and the social experience of inequality—a simulated society experiment. Across two experiments (N = 138, observations = 690), participants voted on the distribution of rewards—first behind a veil of ignorance, and then when they were randomly assigned a status within a game of chance. Status varied repeatedly across five rounds, allowing us to measure dynamic preferences. Under the veil of ignorance, people preferred inequality favoring the top status. When the veil of ignorance disappeared, self-interest immediately influenced inequality preferences. Those who randomly landed in top positions were satisfied with the status quo established under the veil of ignorance, whereas those who randomly landed in bottom positions wanted more equality. Yet these preferences were not stable; decisions about the optimal level of inequality changed according to changes in social status. Our results also showed that, when inequality grows in a society, preferences regarding inequality become polarized by social status. Individuals in low-status positions, particularly, tend to demand more equality.
Contra Rawls, people behind the veil of ignorance choose greater inequality which should thus be given high ethical weight. It’s the demand for equality that should be interrogated for self-interested motivations.
Hat tip: The excellent Kevin Lewis.
It’s the malaise and gloom, not the anger
From Omer Ali, Klaus Desmet, and Romain Wacziarg:
We study whether anger fuels the rise of populism. Anger as an emotion tends to act as a call to action against individuals or groups that are blamed for negative situations, making it conducive to voting for populist politicians. Using a unique dataset tracking emotions for a large sample of respondents from 2008 to 2017, we explore the relationship between anger and the populist vote share across U.S. counties. More angry counties displayed stronger preferences for populist candidates during the 2016 presidential primaries and elections. However, once we control for other negative emotions and life satisfaction, anger no longer operates as a separate channel in driving the populist vote share. Instead, our results indicate that a more complex sense of malaise and gloom, rather than anger per se, drives the rise in populism.
Here is the full NBER working paper.
Long-term relatedness and income distribution
This article explores the role of long-term relatedness between countries, captured by an index of genetic distance, in driving worldwide differences in income inequality. The main hypothesis is that genetic distance gives rise to barriers to the international diffusion of redistributive policies and measures, and institutions, leading to greater income disparities. Using cross-country data, I consistently find that countries that are genetically distant to Denmark—the world frontier of egalitarian income distribution—tend to suffer from higher inequality, ceteris paribus. I also demonstrate that genetic distance is associated with greater bilateral differences in income inequality between countries. Employing data from the European Social Survey, I document that second-generation Europeans descending from countries with greater genetic distance to Denmark are less likely to exhibit positive attitudes towards equality. Further evidence suggests that effective fiscal redistribution is a key mechanism through which genetic distance to Denmark transmits to greater income inequality.
That is from a newly published paper by Trung V Vu.
A mild return for Danish phrenology?
A new study in Denmark used machine learning techniques on photographs of faces of Danish politicians to predict whether their political ideology is left- or right-wing. The accuracy of predictions was 61%. Faces of right-wing politicians were more likely to have happy and less likely to have neutral facial expressions. Women with attractive faces were more likely to be right-wing, while women whose faces showed contempt were more likely to be left-wing. The study was published in Scientific Reports.
Of course such results rarely replicate across different countries, including the United States. Here is the full link, via CB.
My Conversation with Noam Chomsky
Here is the audio, video, and transcript. Here is the episode summary:
Noam Chomsky joins Tyler to discuss why Noam and Wilhelm von Humboldt have similar views on language and liberty, good and bad evolutionary approaches to language, what he thinks Stephen Wolfram gets wrong about LLMs, whether he’s optimistic about the future, what he thinks of Thomas Schelling, the legacy of the 1960s-era left libertarians, the development trajectories of Nicaragua and Cuba, why he still answers every email, what he’s been most wrong about, and more.
I would stress there is no representative sample from this discussion, so any excerpt will not give you a decent sense of the dialogue as a whole. Read the whole thing, if you dare! Here is one squib, in fact it is the opener, after which we ranged far and wide:
COWEN: If I think of your thought, and I compare it to the thought of Wilhelm von Humboldt, what’s the common ontological element in both of your thoughts that leads you to more or less agree on both language and liberty?
CHOMSKY: Von Humboldt was, first of all, a great linguist who recognized some fundamental principles of language which were rare at the time and are only beginning to be understood. But in the social and political domain, he was not only the founder of the modern research university, but also one of the founders of classical liberalism.
His fundamental principle — as he said, it’s actually an epigram for John Stuart Mill’s On Liberty — is that the fundamental right of every person is to be free from external illegitimate constraints, free to inquire, to create, to pursue their own interests and concerns without arbitrary authority of any sort restricting or limiting them.
COWEN: Now, you’ve argued that Humboldt was a Platonist of some kind, that he viewed learning as some notion of reminiscence. Are you, in the same regard, also a Platonist?
CHOMSKY: Leibniz pointed out that Plato’s theory of reminiscence was basically correct, but it had to be purged of the error of reminiscence — in other words, not an earlier life, but rather something intrinsic to our nature. Leibniz couldn’t have proceeded as we can today, but now we would say something that has evolved and has become intrinsic to our nature. For people like Humboldt, what was crucial to our nature was what is sometimes called the instinct for freedom. Basic, fundamental human property should lie at the basis of our social and economic reasoning.
It’s also the critical property of human language and thought, as was recognized in the early Scientific Revolution — Galileo, Leibniz — a little later, people like Humboldt in the Romantic era. The fundamental property of human language is this unique capacity to create, unboundedly, many new thoughts in our minds, and even to be able to convey to others who have no access to our minds their innermost workings. Galileo himself thought the alphabet was the most spectacular of human inventions because it provided a means to carry out this miracle.
Humboldt’s formulation was that language enables language and thought, which were always pretty much identified. Language enables what he called infinite use of finite means. We have a finite system. We make unbounded use of it. Those conceptions weren’t very well understood until the mid-20th century with the development of the theory of computation by Kurt Gödel, Alan Turing, and other great mathematicians, 1930s and ’40s. But now the concept of finite means that provide infinite scope is quite well understood. In fact, everyone has it in their laptop by now.
COWEN: Was it the distinction between natural and artificial language that led Rousseau astray on politics?
I will say that I am very glad I undertook this endeavor.
What is the optimistic case for Kenya?
That is the topic of my latest Bloomberg column:
…a locale with a reasonable level of English fluency and an attractive year-round climate will get a lot of attention — and that nicely describes Kenya. Kenya also had a growth rate of about 5.5% last year, despite negative shocks to the prices of imported food and energy. Since 2004, growth rates have been in the range of 4% to 5%.
Kenya also has some geographic advantages. It has an extensive coastline on the Indian Ocean, and research suggests that landlocked countries have worse economic performance. Countries with a coast also find it easier to stay in touch with the rest of the world, and Kenya has relatively easy access to China and India, large markets and sources of capital. In the current geopolitical climate, East Africa is attracting more interest from more sources than is most of West Africa.
In terms of scale, Kenya’s population of about 57 million cannot compete with Nigeria’s 222 million. But East Africa, with almost 500 million people, has a larger population than West Africa.
And if you are looking for the case against, yes there is one:
That said, expensive energy — due in part to taxes and poor regulation — has been a growth drawback.
There are other elements of the case against Kenya. It has had difficulty attracting foreign direct investment, even compared to other African nations. Corruption, regulatory barriers to entry and political instability remain concerns and cannot be dismissed lightly.
Recommended, worth a ponder, there are further arguments at the link.
Game theory and the First World War
By Nobel Laureate Roger Myerson:
Books by Scott Wolford and Roger Ransom show how economic theories of games and decisions can be fruitfully applied to problems in World War I. This vital application offers fundamental insights into the analytical methods of game theory. Public random variables may be essential factors in war-of-attrition games. An assumption that nations can coordinate on Pareto-superior equilibria may become less tenable when nations are at war. Interpreting a surprising mistake as evidence of an unlikely type can have serious consequences. The ability of leaders to foster consistent beliefs within a cohesive society can create inconsistency of beliefs between nations at war.
Just published in the (ungated) Journal of Economic Literature.
Ian Dunt on how Westminster works, or doesn’t
I enjoyed his new book How Westminster Works…And Why It Doesn’t.
Here is one short excerpt:
The continued use of Downing Street is an act of pathological national sentimentality, the product of a country that has come to value tradition over function and its past over its future.
Various attempts have been made to reform it, but they all came to nothing. Powell tried to convince Blair to swap it for open-plan space in the nearby Queen Elizabeth II conference centre, but was twice defeated. In August 2008, Gordon Brown set up a horseshoe-shaped work centre in the chief whip’s office in No. 12 Downing Street. Cameron dropped it as soon as he entered government. Dominic Cummings, chief adviser to Boris Johnson, moved to 70 Whitehall to create a kind of space station information nerve centre, but the project died when he was sacked.
Instead, the British government has simply made do with a physical structure that prohibits it from working effectively.
Dunt defends the House of Lords (!) as one of the most functional parts of British government, calls for proportional representation, and most of all he wants to open up candidate selection to the public.
Here is his summary take on what is wrong:
At the heart of the problem with Westminster is machismo. It’s a sense, deep at the base of our assumptions, about what politics is about and how we conduct ourselves: that we do not need to seek consensus or compromise, that the winner takes all, evidence can be ignored, the government must get with civil servants who are moved so quickly they cannot sensibly advise on what is happening, and would be undermined by a spad caste even if they could.
Spad cast refers to special advisors.
Sam Bowman on French success
But Ben Southwood has convinced me that France is rich because it gets the big things basically right. Housing supply there is freer: the overall geographic extent of Paris’s metropolitan area roughly tripled between 1945 and today, whereas London’s has grown only a few percent. Infrastructure is better: 29 French cities have trams, versus 11 here (likely one reason its second-tier cities are much more productive than Britain’s). It has nearly 12,000km of motorways versus around 4,000km here – and French motorways tend to be smoother and better kept (and three quarters are tolled, making congestion much less of a problem). Childcare is cheaper: about half the price per month, in part because they require half the staff. Energy is more abundant, as shown above. Because it gets those big four things right, it can afford to get a lot of other things wrong.
Here is the full essay, mostly on Coasean democracy.
Orwell Against Progress
Orwell was deeply suspicious of technology and not simply because of the dangers of totalitarianism as expounded in 1984. In The Road to Wigan Pier, Orwell argues that technology saps vigor and will. He quotes disparagingly, World Without Faith, a pro-progress book written by John Beever, a proto Steven Pinker in this respect.
It is so damn silly to cry out about the civilizing effects of work in the fields and farmyards as against that done in a big locomotive works or an automobile factory. Work is a nuisance. We work because we have to and all work is done to provide us with leisure and the means of spending that leisure as enjoyably as possible.
Orwell’s response?
…an exhibition of machine-worship in its most completely vulgar, ignorant, and half-baked form….How often have we not heard it, that glutinously uplifting stuff about ’the machines, our new race of slaves, which will set humanity free’, etc., etc., etc. To these people, apparently, the only danger of the machine is its possible use for destructive purposes; as, for instance, aero-planes are used in war. Barring wars and unforeseen disasters, the future is envisaged as an ever more rapid march of mechanical progress; machines to save work, machines to save thought, machines to save pain, hygiene, efficiency, organization, more hygiene, more efficiency, more organization, more machines–until finally you land up in the by now familiar Wellsian Utopia, aptly caricatured by Huxley in Brave New World, the paradise of little fat men.
What’s Orwell’s problem with progress? He is a traditionalist. Orwell thinks that men need struggle, pain and opposition to be truly great.
…in a world from which physical danger had been banished–and obviously mechanical progress tends to eliminate danger–would physical courage be likely to survive? Could it survive? And why should physical strength survive in a world where there was never the need for physical labour? As for such qualities as loyalty, generosity, etc., in a world where nothing went wrong, they would be not only irrelevant but probably unimaginable. The truth is that many of the qualities we admire in human beings can only function in opposition to some kind of disaster, pain, or difficulty; but the tendency of mechanical progress is to eliminate disaster, pain, and difficulty.
..The tendency of mechanical progress is to make your environment safe and soft; and yet you are striving to keep yourself brave and hard.
I will give Orwell his due, he got this right:
Presumably, for instance, the inhabitants of Utopia would create artificial dangers in order to exercise their courage, and do dumb-bell exercises to harden muscles which they would never be obliged to use.
Orwell’s distaste for technology and love of the manly virtues of sacrifice and endurance to pain naturally push him towards zero-sum thinking. Wealth from machines is for softies but wealth from conquest, at least that makes you brave and hard! (See my earlier post, Orwell’s Falsified Prediction on Empire). Orwell didn’t favor conquest but it’s part of his pessimism that he sees the attraction.
Another of Orwell’s tragic dilemmas is that he doesn’t like progress but he does favor socialism and thus finds it unfortunate that socialism is perceived as being favorable to progress:
…the unfortunate thing is that Socialism, as usually presented, is bound up with the idea of mechanical progress…The kind of person who most readily accepts Socialism is also the kind of person who views mechanical progress, as such, with enthusiasm.
Orwell admired the tough and masculine miners he spent time with in the first part of Wigan Pier. In the second part he mostly decries the namby-pamby feminized socialists with their hippy-bourgeoise values, love of progress, and vegetarianism. I find it very amusing how much Orwell hated a lot of socialists for cultural reasons.
Socialism is too often coupled with a fat-bellied, godless conception of ’progress’ which revolts anyone with a feeling for tradition or the rudiments of
an aesthetic sense.…One sometimes gets the impression that the mere words ‘Socialism’ and ‘Communism’ draw towards them with magnetic force every fruit-juice drinker, nudist, sandal-wearer, sex-maniac, Quaker, ‘Nature Cure’ quack, pacifist, and feminist in England.
…If only the sandals and the pistachio coloured shirts could be put in a pile and burnt, and every vegetarian, teetotaller, and creeping Jesus sent home to Welwyn Garden City to do his yoga exercises quietly!
What Orwell wanted was to strip socialism from liberalism and to pair it instead with conservatism and traditionalism. (I am speaking here of the Orwell of The Road to Wigan Pier).
It’s still easy today to identify the sandal wearing, socialist hippies at the yoga studio but socialism no longer brings to mind visions of progress. Today, fans of progress are more likely to be capitalists than socialists. Indeed, socialism is more often allied with critiques of progress–progress destroys the environment, ruins indigenous ways of life and so forth. A traditionalist socialism along Orwell’s lines would add to this critique that progress destroys jobs, feminizes men, and saps vitality and courage. Thus, Orwell’s goal of pairing socialism with conservatism seems logically closer at hand than in his own time.
Orwell’s Falsified Prediction on Empire
In The Road to Wigan Pier, George Orwell argued:
…the high standard of life we enjoy in England depends upon our keeping a tight hold on the Empire, particularly the tropical portions of it such as India and Africa. Under the capitalist system, in order that England may live in comparative comfort, a hundred million Indians must live on the verge of starvation–an evil state of affairs, but you acquiesce in it every time you step into a taxi or eat a plate of strawberries and cream. The alternative is to throw the Empire overboard and reduce England to a cold and unimportant little island where we should all have to work very hard and live mainly on herrings and potatoes.
Wigan Pier was published in 1937 and a scant ten years later, India gained its independence. Thus, we have a clear prediction. Was England reduced to living mainly on herrings and potatoes after Indian Independence? No. In fact, not only did the UK continue to get rich after the end of empire, the growth rate of GDP increased.
Orwell’s failed prediction stemmed from two reasons. First, he was imbued with zero-sum thinking. It should have been obvious that India was not necessary to the high standard of living enjoyed in England because most of that high standard of living came from increases in the productivity of labor brought about by capitalism and the industrial revolution and most of that was independent of empire (Most. Maybe all. Maybe more than all. Maybe not all. One can debate the finer details on financing but of that debate I have little interest.) The second, related reason was that Orwell had a deep suspicion and distaste for technology, a theme I will take up in a later post.
Orwell, who was born in India and learned something about despotism as a police officer in Burma, opposed empire. Thus, his argument that we had to be poor to be just was a tragic dilemma, one of many that made him pessimistic about the future of humanity.
Acemoglu on the Turkish polity and economy
Preliminary but fairly clear results from the runoff of the Turkish elections show that President Erdogan will have a historic third term. This has implications for democracy and the economy.
— Daron Acemoglu (@DAcemogluMIT) May 28, 2023
*Why Congress*
By Philip A. Wallach, of the American Enterprise Institute. Here is the book’s home page. Here is a review of the book. A very good book. As I read Phil, he is suggesting that Congress is even a wee bit underrated. You can buy it here.
How effective was the IAEA?
Here is the Open AI call for international regulation, most of all along the lines of the International Atomic Energy Agency. I am not in general opposed to this approach, but I think it requires very strong bilateral supplements, from the United States of course. Which in turn requires U.S. supremacy in the area, as was the case with nuclear weapons. From a 564 pp. official work on the topic:
For nearly forty years after its birth in 1957 the IAEA remained essentially irrelevant to the nuclear arms race. (p.22)
There is also this:
However, in the late 1950s and early 1960s it was not the failure of the IAEA’s functions as a ‘pool’ or ‘bank’ or supplier of nuclear material that inflicted the most serious blow on the organization, on its safeguards operation and eventually on Cole himself. For a variety of reasons, the Agency’s chief patron, the USA, chose to arrange nuclear supplies bilaterally rather than through the IAEA. One reason was that the IAEA had been unable to develop an effective safeguards system. Another was that in a bilateral arrangement it was the US Administration, under the watchful eyes of Congress, that chose the bilateral partner rather than leaving the choice to an international organization that would have to respond to the needs of any Member State whatever its political system, persuasion or alliance. But the most serious setback came in 1958 when, for overriding political reasons, the USA chose the bilateral route in accepting the safeguards of EURATOM as equivalent to — in other words as an acceptable substitute for — those of the IAEA.
It is frequently suggested that the IAEA has been partially captured by the nuclear sector itself. I do not consider that bad news, but it is a sobering thought for those expecting too much from this approach. Do note that it took years to set up the agency, and furthermore when North Korea wanted to acquire nuclear weapons the country simply left the agency and broke its earlier agreement. Perhaps the greatest gain from this approach is that the non-crazy nations have a systematic multilateral framework to work within, should they decide to defer to the external, bilateral pressure from the United States?
On the other side, my fear is that the international agreement will lead to excess regulation at the domestic level.
There is also this:
The fact that Iraq’s nuclear weapon programme had been under way for several years, perhaps a decade, without being detected by the IAEA, led to sharp criticism of the Agency and posed the most serious threat to the credibility of its safeguards since they had first been applied some 30 years earlier.
All of these issues could use much more intelligent discussion.