Thoughts on economics and liberty

Category: Current Affairs

Tony Burke admits human fallibility. Now will “climate change” policies be reviewed, please?

I came across this interesting short paragraph in today's Australian.

Mr Burke said Treasury's report had not been a helpful contribution. "There is very limited utility in 40-year projections," he said. "Let's face it, if you went back five years people didn't know the global financial crisis was coming. They didn't know about the mining boom mark II. Once you're offering projections . . . of more than five years they're not offering a whole lot of assistance in what you should be doing right now in public policy."

It is extremely rare (and therefore refreshing) to hear a politician express common sense. (Note that this doesn't mean one can't predict long-term trends – but a trend is not the same as a precise projection. I might add that population being my area of 'expertise', I have not yet seen one population forecast that has held up to the test of time. That is why I don't care much about the debates occurring on Becker-Posner blog  about the population projection of 10 billion issued recently by idle UN bureaucrats.)

But Tony Burke's statement has implications. The fact that projections of more than five years don't offer "a whole lot of assistance in what you should be doing right now in public policy" is true for many more things. 

In particular, Burke's Government can now review its "climate change" policies which are based on projections 100 years into the future. If forecasts for 2050 are questionable (and they are), then what kind of credibility do forecasts for 2100 have? 

As expected, most, if not all, of IPCC's short term (10-15 year) forecasts have been PROVEN false. In addition, a good number of studies have questioned IPCC's long-term projections. Consider this study on the sea level: 

[T]he estimate of over 1m and higher rise in sea level by 2100 (in next 90 years) seems unrealistic, when analyzed in the context of present sea level rise which is just about 1.5mm to 2.0 mm per year with almost NO component of acceleration. For the global sea level to rise by over 1m in the next 90 years would require acceleration (in sea level rise) of up to 0.28mm/yr2, which is almost two orders of magnitude larger than present. This seems highly unlikely at present given the fact that the earth’s climate has not warmed in the last ten years and further that the earth’s mean temperature seems to be declining at present.

If nothing else, this kind of study shows that there are at least two well-informed views on the future of the sea level. With  "climate science" not yet out of its infancy, why not let more research be conducted before slugging the Australian economy – which is already suffering from many Keynesian follies – with another huge hit? 

Let the link between CO2 and acceleration in temperature be established conclusively before considering interventionist policies. 

[See also my comment on Garnaut, and my posts on the sea level here and here]

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America’s amazing “intellectuals”

I might have glanced at Christopher Hitchens's work here or there but don't much pay attention to what he writes. However, I did read his piece on Chomsky today (published also in The Slate) and it was very good.

Note that Chomsky had recently written the following (see this):

We might ask ourselves how we would be reacting if Iraqi commandos landed at George W. Bush’s compound, assassinated him, and dumped his body in the Atlantic. Uncontroversially, his crimes vastly exceed bin Laden’s, and he is not a “suspect” but uncontroversially the “decider” who gave the orders to commit the “supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole” (quoting the Nuremberg Tribunal) for which Nazi criminals were hanged: the hundreds of thousands of deaths, millions of refugees, destruction of much of the country, the bitter sectarian conflict that has now spread to the rest of the region.

This amazing view of Chomsky is summarised by Hitchens thus, in his article today, in The Slate:

In short, we do not know who organized the attacks of Sept. 11, 2001, or any other related assaults, though it would be a credulous fool who swallowed the (unsupported) word of Osama Bin Laden that his group was the one responsible. An attempt to kidnap or murder an ex-president of the United States (and presumably, by extension, the sitting one) would be as legally justified as the hit on Abbottabad. And America is an incarnation of the Third Reich that doesn't even conceal its genocidal methods and aspirations. This is the sum total of what has been learned, by the guru of the left, in the last decade.

So one thing is clear, that Chomsky is a fool. Well, there is freedom of speech in USA, and freedom to indulge in wild delusions, so let's leave Chomsky and his followers aside. I plan to continue ignoring Chomsky's writings. 

But what about Hitchens? Today's article kindled my interest and I thought I should inquire further. But when I checked Wikipedia I found him to be a Marxist! (but associated with the Hoover Institution – what's going on??)

Hitchens has apparently called himself a Marxist as late as in 2006 (!) and is an admirer of Lenin and Troksky. I can't understand how he calls Chomsy the "guru of the left" when he himself is a leftist "guru".

More problematically, a quick scan through the Wiki page cited above shows that his views are totally disjointed and inconsistent. I can understand that, for Marxists tend to think in terms of 'power' and 'hegemony'. That totally confuses these poor chaps. They have no understanding of liberty, and ZERO understanding of the free economy (despite their claims that Marx was an economist, he was an extremely incompetent one, at best). No wonder their ideas are all over the joint.

And Hitchins is not a social liberal, either. What is he? Neither fish nor fowl…

Anyone willing to enlighten me?


America’s amazing “intellectuals”

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Is the tide turning? Is India becoming receptive to capitalism?

Finally, some good news. Nearly 60 per cent of the respondents from India in a survey conducted by Globescan reported a positive or strongly positive view about free markets. 12,884 people were interviewed across 25 countries. This is not a particularly great sample but perhaps it can provide a feel for the overall direction?

If this survey is even remotely useful, it would indicate that the tide of socialism is now beginning to retreat in India. After destroying the lives of millions of Indians, socialism could be on the way out. 

Is India Breaking Free of Nehru?

This is also good news for the Freedom Team which could find more members and supporters in the coming years. 

Methodology for the survey

The question used was: Please tell me if you strongly agree, somewhat agree, somewhat disagree, or strongly disagree with each of the following statement: The free market system and free market economy is the best system on which to base the future of the world

The results

The  results of this survey are considered accurate within +/- 3.0 to +/- 4.9 per cent. 

How does India fare against others?

This graph from  The Economist is self-explanatory. I'd hazard a guess that in the coming decades those economies that have greater confidence in freedom will outperform those that do not. 

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A much cheaper way to combat terrorism

Andrea Millen Rich has added up The Cost of Getting Bin Laden:

  • a total of 4,452 American soldiers have been killed in action in Iraq
  • a total of 1,566 U.S. troops killed in action in Afghanistan
  • the direct taxpayer cost of both wars had eclipsed $1.1 trillion
  • hundreds of billions have also been spent on homeland security and intelligence gathering efforts (the federal government revealed that it was spending more than $80 billion a year on intelligence gathering—more than twice the pre-9/11 amount. Tthe proposed budget for homeland security efforts in the coming fiscal year will top $71 billion)
  • the government has trampled the First, Fourth, Fifth Sixth, Eighth, and 14th Amendments—all in the name of safeguarding our nation from itself.
  • callous invasions of their privacy via intrusive pat-downs and obscene full-body scans at the country’s airports

Hans-Hermann Hoppe argued in The Myth of National Defense (ed. Hoppe, Von Mises Institute) that government monopoly over defence is ineffective and expensive. As illustration, even though US defence budgets are quite large, they have proved ineffective in protecting US interests. The US defence and policy machine keeps asking for more money but delivers ever less security. Hoppe believes that the World Trade towers attacks could have been prevented merely by allowing pilots carry a pistol costing $50. The $400 billion defence budget couldn’t prevent 9/11. 

Hoppe's argument is interesting but, as I show in DOF, it doesn't lead to the conclusions he arrives at. However, there is something that a state (e.g. USA) can do at a low cost to dramatically increased security – through persuasion and winning people's minds. 

Thus, the other day (4 May 2010) I wrote on Facebook that "They are often extremely naive and even stupid, these Americans. I also think their doctrine of national self-interest has been a BAD doctrine. The national self-interest is best served in the longer term through supporting GOOD, not evil. Each time they support a dictator, they harm America in the long run." 

This holds good for the British as well. When they supported Jinnah's demand for partition on religous grounds, they mixed religion and politics, went against their own liberal tradition, and created the monster of Pakistan that is now almost uncontrollable, and has become the hub centre for terrorism across the entire world.

For years I've been advocating abolition of foreign aid and its replacement with EQUAL AND HONEST relationships across all nations. That means looking at long-term self-interest, not just the short-term. This means focusing on (a) promotion of liberty and good governance across the world, and (b) calling a spade a spade (e.g. not supporting dictators). It also means NEVER giving charity unless there is desperate need.

As I wrote in my FF article on foreign aid:
  • Aid strengthens totalitarian dictators and increases genocides and global terrorism.
  • Genuine well-wishers of the poor should therefore stop all charitable work and become equal partners and friends of the poor. They can, as part of this role, teach poor nations about freedom and good governance. Taking this approach is not only ethical, cheaper, and far more effective, it will also ultimately protect the West from terrorism.
  • it is crucial that Western nations do not directly teach poorer nations; for that could be interpreted as racist arrogance. Freedom must be promoted through poor nations’ own nationals.

There is no doubt in my mind that many effective and cheap methods exist to promote freedom and good governance. They will work invariably better than hard, brutal actions that the West often undertakes without thinking through the long term consequences. If nothing else, these cheaper (but slower) approaches should be part of a mix of strategies. [Note, I'm not against hard brutal actions in principle. They may have a place as well, but should not be seen to be the primary method of engagement]

Currently the fist rules, the handshake is missing. There is no genuine goodwill. That can't work.

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