July 13, 2016

Post–Referendum Blues

Writing about web page http://www.express.co.uk/comment/columnists/leo-mckinstry/688112/Remainers-country-Brexit-vote-referendum

--- I'm going to shoot myself in the foot.

--- Don't. It'll hurt.

Bang.

--- Owww.

--- I told you.

--- Now you're talking me down.


June 13, 2016

I Will Vote Remain

Writing about web page http://www.strongerin.co.uk/

I will vote Remain for lots of reasons. As a parent I want my children and their children to grow up in a world that is open and free. Brexit will shrink their world and reduce their opportunities.

As a citizen I see that Brexit will leave our country isolated and less secure. Our friends inside the EU and outside urge us to stay. Our adversaries would prefer us to leave.

Among other things I am an economist and a historian. As a historian I know that in 1956 the European countries that had been strategic rivals for centuries chose integration instead. That’s why France and Germany no longer fight each other, and the poorer countries around them can also live in peace. In 1973 Britain joined them. That was the right choice.

As an economist I know the evidence shows that membership of the European community has brought significant net benefits to Britain. I am with the overwhelming majority of my profession in expecting both short-term damage and persistent losses from Brexit. In the short term there would be turbulence. In the long term we would be less deeply integrated with Europe, and somewhat poorer as a result.

But it’s more than just economics. Brexit would be an inward turn, a turn away from strangers.

We, human beings, systematically underestimate what we have gained from interaction with strangers. We forget that strangers gave us chocolate and silk. They gave us Christianity, democracy, and Roman law. They gave us impressionism and jazz. Now it's our music, our democracy, and our chocolate.

It’s true, strangers are also risky: we feared and fought them, enslaved them, and caught Spanish flu from them. But strangers are the key to our future. Turn away and you turn your back on life.


June 02, 2016

When Central and Eastern Europe Led the World

Writing about web page https://drive.google.com/file/d/0B7VJ1wykdp_YdXBiT3ZCT3FKNGM/view

Last week I spent a few days in Regensburg, a pretty town in Bavaria. The subject of our conference was the economic history of central, eastern, and southeastern Europe since 1800. The meeting was convened by the excellent Matthias Morys of the University of York; Matthias is editing a book on this theme for Routledge. The general standard of the chapters is going to be exceptional. (I’m not an author; I went along to hear and discuss.)

An important theme of the book will be how central and eastern Europe lagged behind western Europe in productivity and social well-being, and the varying successes and (mostly) failures of the region in closing the gap. This raised a question: Should central and eastern Europe always be judged against western European countries, as though we (the West) set the only standards that count? Shouldn’t everyone try to understand that region in its own terms, without negative preconceptions?

We had reached the interwar period of 1918 to 1939 when a commentator raised this question sharply. It’s a good question, and it brings us in a surprising direction. Think about it: what were the standards that the nation states and regimes of Central and Eastern Europe set themselves, whether in the interwar period or over the last two centuries? Often enough, the answer turns out to be, the goal that they set was to catch up with Western Europe.

At first sight this takes us back to where we started, to the standards of productivity and social well-being set in Western Europe. But this would not be strictly accurate. When the states and rulers of central and eastern Europe set out to catch up, it was not so much in average incomes or welfare, which were not even measured systematically until the middle of the twentieth century. The dimension in which they aimed to catch up was that of national power.

As it turns out, the first decades of the twentieth century were a time of great success for two of the countries of central and eastern Europe in the race to catch up and overtake western Europe in national power. These countries were Germany and the Soviet Union.

National power can be measured, although imperfectly. The scholars of the Correlates of War project set out to measure the global distribution of national power with a “composite index of national capability” (CINC) designed to capture “the ability of a nation to exercise and resist influence.” A country’s CINC score combines six indicators of its relative weight in the international system, year by year: total population, urban population, iron and steel production, energy consumption, military personnel, and military expenditure. On this measure, in 1871, the Russian and German Empires together accounted for one fifth of the total of power in the world (12 percent for Germany and 8 percent for Russia). By 1914, through industrialization and rearmament, they had pushed up their combined weight to more than one quarter (14 percent to Germany, 12 percent to Russia). And by 1940, after more expansion and more rearmament, when Hitler’s and Stalin’s regimes were temporarily in alliance, their share had risen to nearly one third (17 percent to Germany, 14 percent to the Soviet Union).

(For data sources and more context, look at Table 1 of this paper.)

Within 70 years, in summary, the two great powers of central and eastern Europe transferred more than one tenth of global power into their own hands. This was a dramatic shift in the balance of power, and a stunning achievement.

Thinking about this, I said in the conference: You want us to celebrate the aspects in which the countries of eentral and eastern Europe led the world at the time? OK, let’s hear it for autocracy, aggression, and mass killing. I was trying to be ironic, but I wasn’t sure if something got lost in translation.

Of course, you could be central or east European and be happy. Anywhere in the region, most of the time, you could live, love, carry on a trade, make a family, make art, make science, teach, and build. You could try to lead a good life, a life no worse than the lives led by anyone to the West. Bad things might happen to interrupt these efforts anywhere in Europe, west or east. For centuries, however, if you lived to the east of the Rhine, the probability that your efforts would be cruelly ended by young men in uniform under orders from above was much, much greater.

To understand why is the challenge for Matthias and his co-authors..


March 21, 2016

How We Paid for Spitfires

Writing about web page http://www.bbc.co.uk/news/uk-england-35697546

On 5 March we marked the eightieth anniversary of the 1936 maiden flight of the Supermarine Spitfire, a fighter airplane that played a decisive role in Britain's air defence in World War II. The British affection for the Spitfire is partly for its role in our history, and partly for its elegant design. Like thousands of other boys of the 1950s (and no doubt a few girls, but this was the 1950s), I made up model aircraft from plastic construction kits. I think my first was the even more beautiful Hawker Hunter. The Spitfire was perhaps my second, and always my favourite.

A few days ago the BBC journalist Greig Watson wrote some engaging pieces on the Spitfire's anniversary, here and here. The second of these describes the Spitfire Fighter Fund, through which the public was invited to contribute to their cost. While he was preparing this piece, Greig wrote to me:

Clearly pilots were not sat around waiting for a cheque to arrive so they could purchase a new plane – so could it be argued the funds were just a publicity stunt which made no difference to the number of Spitfire in the air? Or were they in fact effective?

In his article Greig quotes me briefly – right at the bottom, if you struggle to find the place. Here's the full reply that I sent him.


From 1940 onwards, Britain had a command economy. The market economy was restricted to the sidelines: those foodstuffs that were unrationed, and the black market. For most things the government set targets and priorities, decided how money would be spent, and on what, and how much of nearly everything would be produced. That included Spitfires. Only after ensuring the supply of Spitfires did the government worry about how to pay for them. Quite right, too, that’s what you do in an existential struggle. That’s not to say they did not care how it was paid for. They did care. But still, it was a secondary care, one that came after working out how many ships and planes we should make.

From this perspective, Spitfire funds were like today’s “sponsor a panda” and “buy a metre of rainforest” appeals. In any immediate sense these make no difference to the number of pandas or the amount of rainforest. They do put money into the hands of campaigning organizations and charities. We trust them to make a difference, and we get some small satisfaction from the cloak of sponsorship.

What difference did Spitfire funds make? They did not make any difference to the number of Spitfires, because for most of the war Spitfires were a top government priority (along with ships and other planes). If you run out of money, it’s not the top priority that is at risk. It’s the bottom priority that is most likely to be neglected.

What would have happened without Spitfire funds? Two scenarios.

  • Scenario 1: with less money coming in, the government might have economized on the bottom priority, which could have been, say, the rehousing of bomb victims. So more civilians would have been homeless and morale on the home front might have been that bit lower.
  • Scenario 2: the government might have spent the money on the war anyway, by printing it, so more money would have been in circulation in the economy. Since most goods were rationed, the extra money might have found its way into the black market, raising prices for under-the-counter food. Because of this, some army battalion quartermaster would have been tempted to sell army rations on the black market, so more soldiers would have gone hungry and morale on the fighting front would have been that bit lower.

Thus, Spitfire funds did not pay for Spitfires, but they were still an essential part of the war effort. Without them the war would eventually have gone less well in one aspect or another. There would have been a cost.

According to Greig Watson, the total subscribed by the public was £13m. This would have covered only a small fraction of the Spitfires produced in wartime. (The total number of Spitfires produced up to 1948 was just over 20,000. Their average unit cost lay somewhere between the £13,000 of an early batch sold to Estonia in 1939 and the notional £5,000 set by the Spitfire funds appeal.) The rest was paid out of general taxation and government borrowing, both of which reached large fractions of national income.


March 11, 2016

Whatever is Abnormal is Suspicious

Writing about web page http://arstechnica.com/information-technology/2016/03/china-is-building-a-big-data-plaform-for-precrime/

China is investing heavily in its capacity to monitor and evaluate the attitudes and behaviour of the population. On 14 June 2014 the State Council issued a Notice concerning Issuance of the Planning Outline for the Construction of a Social Credit System. The plan envisages that by 2020 every adult Chinese citizen will have a social credit rating.

In a market economy, a person's credit is based on the record of what you earn, spend, borrow, and repay. You gain credit by demonstrating that you can handle money within the law and by honouring your debts. In China, "social credit" is partly financial, but it's also cultural and political. Social credit is gained, not just by handling money honestly and non-corruptly, but also, on a reasonable interpretation of the official language, by knowing the right people and showing the right attitudes in your social and political behaviour.

In other words, just as you can lose financial credit by breaking money rules, you will lose social credit by knowing the wrong people and saying the wrong things. And these things will interact, so that if you know the wrong people or say the wrong things you will put at risk your ability to borrow and to find responsible employment.

What's it all about? Based on its official motivation, the programme

uses encouragement to keep trust and constraints against breaking trust as incentive mechanisms, and its objective is raising the honest mentality and credit levels of the entire society.

Thus, it's explicit that social credit is an incentive mechanism aimed at behaviour change at the level of the population. Every single adult must must understand the norms that China's ruling communist party sets for personal behaviour in economic, cultural, and political life. Break those norms and you lose trust. Lose trust, and there wil be personal consequences. No one will be beyond the system.

Communist regimes have always aimed to classify their subjects for political reliability, but classification was usually crude and error-prone. Stalin's "usual suspects," (described in my new book One Day We Will Live Without Fear) were anyone who from a non-proletarian background, anyone educated under the old regime, anyone of foreign origin or experience of life abroad, anyone with religious beliefs, and so forth. In Mao's China people were classified into "red" and "black."

What the Chinese authorities have in mind today is a classification that is more sophisticated in every way: multi-dimensional, continuously calibrated, and above all comprehensive.

It's not hard to see the benefit for the party leadership. The party authorizes the norms that you should follow, but enforcing those norms throughout society is an unremitting slog. Through comprehensive "social credit" rating of the population, based on big data, the rulers gain a system that sets up clear incentives for every single citizen to conform in every aspect of their lives. If you have the wrong friends or you're indiscreet on social media, you lose the promotion or you are denied the loan you hoped for. So most people will be persuaded to conform.

Plus, the system will also identify the minority that isn't persuaded, and so resists the official incentives, and it marks them out as security risks.

Recently my attention was grabbed by the technology website Ars Technica discussing China's investments in big data collection such as CCTV:

The authorities are watching for deviations from the norm that might indicate someone is involved in suspicious activity (my emphasis).

I knew I had seen this somewhere before. So I looked for it, and here's what I found:

Our communists should be concerned every day to study and know more deeply processes that are essentially anomalous, that is, incorrect, deviating from the general rule of processes and phenomena, and in a timely way to obtain alerts leading to the exposure of persons intending to carry out hostile actions that can lead to serious consequences (my emphasis again).

This was nearly fifty years ago: on 24 April 1968, Lt. Col. Matulionis, an officer of the Soviet Lithuania KGB, was speaking to a meeting on counter-intelligence priorities of the day. (The documentary record is held on microfilm by the Hoover Institution Library & Archives, where I consulted it.)

Communism in Europe and China had common roots. After that, they went different ways. China today looks very different from the Soviet Union. But in respect of what makes a security risk, China's secret policemen have retained exactly the same idea as the Soviet KGB. An ordered society has normal processes. Good citizens follow those norms. When social norms are disrupted, the result is "anomalous, that is, incorrect."

That's where the secret policeman steps in. What is anomalous is incorrect. It arouses suspicion of a crime, and what is suspicious must be investigated for evidence. Who is behind this, and is the hand of the enemy at work?


February 28, 2016

First, Suspect Your Friends

Writing about web page http://www.amazon.co.uk/One-Will-Live-Without-Fear/dp/0817919147/

In 1983 Sharon Tennison, a US citizen, launched the Center for Citizen Initiatives, an NGO dedicated to improving US-Soviet relations from below. Her work is now in its fourth decade. In support of that work she has spoken up for more understanding of Russia in the West. Recently she has expressed sympathy for President Putin, and criticism of US and NATO policies towards Russia.

On a recent visit to Volgograd, as reported in Russian media and by Radio Free Europe/Radio Liberty, Sharon Tennison and her American interpreter were arrested. They were taken to court and fined for visa violations because, although travelling as tourists, in Volgograd they met with local citizens and discussed relaunching an NGO programme. Pro-government media commentators went further than the court. They described the two Americans as agents of the US state department, and promoters of Western values.

When authoritarian regimes behave like this, many Westerners are baffled. The Russian government faces so many hostile critics abroad; why does it attack its friends at home? What explanation can there be, other than irrationality and paranoia? I am reminded of the puzzlement of Western audiences in the 1930s when, facing active threats from Germany and Japan, Stalin chose to purge his closest associates, sending many to the execution cellar as they protested their loyalty.

In the first chapter of my new book, One Day We Will Live Without Fear, released today on Amazon UK, I address this and related puzzles. The puzzle originates in what the political scientist Ronald Wintrobe called “the dictator’s dilemma”: the more feared is the ruler, the harder it is for him to discover his subjects’ true loyalties.

(My economist colleagues will recognize this as an extreme case of what Timur Kuran described as “preference falsification”: sometimes people acquire incentives to conform with others; regardless of their true loyalties, they cheer with the crowd, or remain silent, hiding any inner reservations. An authoritarian regime like Putin’s provides an extreme case because preference falsification can be found in many contexts, including open, democratic societies. If you are on facebook or twitter, ask how many times you have bitten your tongue rather than enter a controversy and say what you really think. And that is when retribution will merely take the form of a bit of trolling and a few harsh words. The problem becomes more acute, however, when the dictator is listening in, so that a dissenting expression can have real consequences: loss of work, of passport, of liberty, even of life. Then fear spreads.)

For the ruler who inspires dread, the problem is to tell real friends from real enemies. The real enemies have gone under cover. In fact, what is the best cover for an enemy? It is to look like a friend.

In turn the ruler who wants to preserve his power must follow the implications. First, he needs agents who will go under cover to search out the hidden enemies: a secret police. Second, where should the secret police focus? This is a more difficult question, because everyone is a suspect. It suggests an impossible task. The task is made easier, however, by various rules of thumb (in my book there are seven of them). A reasonably obvious rule is to suspect anyone who has had to make special efforts to overcome their past associations or social origins so as to fit in.

Examples abound. Depending on the time and place, the secret police might focus on former heretics who recant, former aristocrats who throw in their lot with the lower orders, Jews who assimilate, abandoning their religion and foreign-sounding names, or anyone who has wormed their way into a confidential relationship with the ruler.

As for Sharon Tennison, she is a foreigner, an American who has spent her life promoting international cultural and friendship exchanges with the people of Russia. For her, the secret policeman’s questions follow naturally. Why does she want to be a friend? Who is behind her, and who is paying her way? On whose authority is she building networks of influence that transcend international frontiers? What is she really doing when she meets with Russians behind closed doors and tries to win their trust? These questions are not irrational or paranoid. They are a rational response to the dictator’s dilemma, which is that your bitterest enemy will try to look like your closest friend.

The reader will understand that I see a parallel with Russia today in the Soviet times that I have written about in my book. The sceptic will press the question: Is Russia today really like the old Soviet Union? Yes and no. The answer is partly “no”: Russia is not a totalitarian society in which the state aspires to monopolize everything. As I wrote just over a year ago:

Even while Russians look to the past, Russia today is absolutely not the Soviet Union … Russians in 2015 lead very different lives from Soviet citizens in 1985. They are richer, live longer, are able to visit, study, phone, and write abroad. Even today they are relatively free to search for and find information and discuss it among themselves.

In those ways Russia today is not so like the Soviet Union. But in other ways the answer is also “yes.” For a start, there is a direct line from the Soviet secret police to Russia’s rulers today, and notoriously to President Putin in person.

There are other similarities too. In Russia today there is rule by decree, to which the Parliament and the courts submit passively, not rule by law, contested in elections and applied by independent courts. In Russia today government is secretive and unaccountable; the regime clings to power and shuts down opposition. In Russia today, to be economically privileged is to be politically privileged, and conversely, not in an approximate, average sort of way, as in Western Europe or North America, but in a strictly deterministic one-to-one relationship: in Russia, lose one, and you will lose the other.

Finally, in Russia today there is increasing fear of the consequences of speaking out. Public opinion is chilled by the concerted abuse of oppositionists and the murder of outspoken reporters and leading critics. The consequences are pervasive. A recent Levada Centre opinion survey found that one quarter of 1,603 Russians surveyed (26 per cent) agreed that they were afraid to give truthful answers to opinion pollsters about the conduct of national affairs (23 percent felt inhibited among colleagues and 17 per cent even in the family).

I am not aware of comparable data from any other time or place so it is hard to set the figure of one quarter in any kind of context. But below this headline figure the Levada Centre survey provided some critical detail. When asked about other people (“Do you agree that most Russians willingly give their opinions in surveys?”) the same survey divided respondents into self-confessed regime supporters and critics. Amongst the small number of open critics the proportion answering “No” was just 22 percent. Among the supporters, it went up to 34 percent. Thus, the chilling atmosphere is felt more strongly by the regime’s apparent supporters than by its critics.

The story of Sharon Tennison illustrates one of the lessons of my book: the distrust and suspicion that characterize authoritarian regimes flow from the top, because the ruler must first of all suspect those who would like to be his friends.

About my book

One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State, by Mark Harrison, published by The Hoover Institution Press, is released in Europe on 28 Feb 2016.

What was life in the Soviet Union really like? Through a series of true stories, One Day We Will Live Without Fear describes what people's day-to-day life was like under the regime of the Soviet police state. Drawing on events from the 1930s through the 1970s, Mark Harrison shows how, by accident or design, people became entangled in the workings of Soviet rule. The author outlines the seven principles on which that police state operated during its history, from the Bolshevik revolution of 1917 to the collapse of the Soviet Union in 1991, and illustrates them throughout the book. Well-known people appear in the stories, but the central characters are those who will have been remembered only within their families: a budding artist, an engineer, a pensioner, a government office worker, a teacher, a group of tourists. Those tales, based on historical records in the Hoover Institution Library & Archives, shine a light on the many tragic, funny, and bizarre aspects of Soviet life.

If you would like to read an excerpt from my book, part of Chapter 1, “The Mill,” is now available online as Enemy of the State.

For those with a special interest in scholarly aspects such as source criticism, my book has an Afterword, “Fact and Fantasy in Soviet Records,” available as a CAGE working paper.


February 02, 2016

The KGB Gave my Book its Title

Writing about web page http://www.amazon.com/One-Will-Live-Without-Fear/dp/0817919147/

My book One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State is published today in the US. It will be available in Europe from February 29. This is the story behind the title of the last chapter of my book, which I also used as the title of the book as a whole.

It’s 1958. David is chatting to his friend. Their subject is David’s dream, which is to emigrate. He’s a Jew, living in Vilnius, the capital of Soviet Lithuania. He was once a Polish citizen, born on territory that was absorbed by the Soviet Union in 1939 when Stalin and Hitler split Poland between them. Suddenly, David was a Soviet citizen. In World War II he fought in the Red Army. After the war he settled in Vilnius, got married, and made a family.

In the 1950s there was a short window when the Soviet authorities allowed people like David, born Polish, to leave for Poland if they wished. His younger sister, Leila, left for Poland the previous year, and from there she was able to travel on to Israel. David did not go with her, but now he regrets that he stayed behind. He would like to follow her, but he finds that he is trapped. Whether he left it too late, or for some other reason, the government will not let him go.

David tells his friend that he has become afraid of even asking about permission to leave.

It could turn out that you put your papers in to OVIR [the Visa and Registration Department] and they give them back to you, and then you get a ticket to Siberia, or they can put you in jail.

David has come to a decision. There's no point dreaming about leaving, he tells his friend. He has concluded it's dangerous even to think about it. He realizes he is going nowhere. He and his family will stay at home. But then he comes back to another thought, perhaps even more dangerous, that he cannot help but voice:

We’ll stay in Vilnius and we'll live in the hope that he [one of the Soviet leaders of the time, not named] and generally this whole system will smash their heads in, and maybe we will live here freely and without fear.

After that, David’s friend went home and made a note of the words David had used. In due course he passed the note to his handling officer, because this friend, unknown to David, was a KGB informer. The note ended up in the files of the Soviet Lithuania KGB, where I came across it more than half a century later.

The KGB handler thought David's remarks were pretty interesting. At the end of the report he summed up:

Report: Information on David received for the first time.

Assignment: The source [David's friend] should establish a relationship of trust with David and clarify his contacts. Investigate his political inclinations and way of life.

Actions: Identify David and verify his records.

Few people who lived in Soviet times ever imagined those times would come to an end. David was one of the few.

One Day We Will Live Without Fear

What was life in the Soviet Union really like? Through a series of true stories, One Day We Will Live Without Fear describes what people's day-to-day life was like under the regime of the Soviet police state. Drawing on events from the 1930s through the 1970s, Mark Harrison shows how, by accident or design, people became entangled in the workings of Soviet rule. The author outlines the seven principles on which that police state operated during its history, from the Bolshevik revolution of 1917 to the collapse of the Soviet Union in 1991, and illustrates them throughout the book. Well-known people appear in the stories, but the central characters are those who will have been remembered only within their families: a budding artist, an engineer, a pensioner, a government office worker, a teacher, a group of tourists. Those tales, based on historical records, shine a light on the many tragic, funny, and bizarre aspects of Soviet life

One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State, by Mark Harrison, is published on 2 February 2016 by the Hoover Press in Stanford, California. Order it today from Amazon US or pre-order it from Amazon UK.


January 25, 2016

Fixing Global Inequality, or Not: Eleven Steps, Not All Easy

Writing about web page http://www.bbc.co.uk/news/business-35339475

I have many cousins of various degrees, all lovely people who care about the state of the world. Cousin #1 recently posted on facebook:

62 vs 3.5 billion. The single worst statistic I've ever heard. (18 January at 10:51)

His comment was prompted by Oxfam’s gloss on the annual Credit Suisse report on the global distribution of wealth, as featured by the BBC: “The world's richest 62 people now own as much wealth as the poorest half.”

Cousin #2 responded:

Open mouthed. (18 January at 19:12)

I butted in:

Some simple (not all easy) ways to improve global inequality as measured by Oxfam/Credit Suisse (a) Bring down property values by reforming western housing markets, because rising property values account for between two thirds and 100% of the rising inequality found by Thomas Piketty (b) Bring down Western bond and equity values by ending quantitative easing in the West (c) Bring down the value of dollar assets relative to assets denominated in other currencies by having more quantitative easing, but only in the US (d) Measure wealth in different countries by converting currencies at purchasing power, not market exchange rates, because currency values are determined by competitive in markets for internationally traded goods whereas many goods (and especially services) are not traded, and their prices are many times lower in poorer countries, e.g. compare getting a haircut in Accra and Manhattan (e) Don't use a stupid measure of wealth that places many middle-class Westerners with mortgage debt among the poorest people in the world (i.e. ignoring the fact that part of being rich is being able to borrow) (f) Measure other aspects of well being too, like morbidity and mortality at all ages, in which the world has been steadily improving for decades AND getting more equal (g) Remember that some poverty and wealth are temporary (during adult life most Americans will BOTH hit the top 10 percent by income AND spend time at the bottom 20 percent); we should worry most about chronic poverty, which also exists (h) Be patient because global income inequality has been steadily diminishing for decades and will continue to do so unless someone does something really stupid (j) Don't do stupid stuff, which ranges from violence to utopian dreaming, e.g. that if you take away all Donald Trump's money and give it to Ghana then Ghana's poor will benefit commensurately, because they won't (k) Remember that charities thrive on making the news look bad (m) Cheer up, because not all news is bad; the world is a better place than we think. (20 January at 10:37)

Cousin #3 came back:

I didn't fully understand your point about not using a "measure of wealth that places middle-class Westerners with mortgage debt among the poorest people in the world". What measure do we use? How does that happen? Does it measure only the value of the debt and not the market value of the property? (20 January at 16:22)

So I had to issue a correction:

You are right to ask and you deserve a correction. There is some guesswork here and I probably made a wrong guess. Not mortgage debt: I should have said "consumer debt and student loans." In more detail the relevant figure is tucked away in the Credit Suisse reportin Table 3.4 (page 110): the United States, one of the richest countries in the world, with approximately 4.5 percent of the world's population, apparently has just over 10 percent of the world's poorest people (in the lowest global decile by wealth as measured there). Compare those figures with other countries -- but which? The US has the third largest population in the world, and there are no others of similar size. Size matters because a larger population implies greater heterogeneity on many dimensions and therefore greater inequality. The next two countries by size are Indonesia and Brazil. Both have populations around the 200 million mark (Table 2-2), so around 2.5 percent of the world's population each. These two countries have Gini coefficients of wealth distribution similar to the US (Table 3-1) and they are also MUCH poorer on average, yet their shares of the world's poorest (Table 3-4), around 3 percent each, only slightly exceed their total population shares. What's going on? On the Credit Suisse measure the "world's poorest" include the people who rent accommodation, are too young to have accumulated pension rights, and borrowed to finance a flatscreen TV or a law degree. It's easier to do both of those things in the US than in Brazil or Indonesia, where many people have no access to credit. (The point I'm making is not original, by the way. It was mentioned in the original BBC report, and others have made the same point in the past in connection with previous Credit Suisse reports and their use by Oxfam.) (21 January at 11:00)

Cousin #3 came back:

So in effect, their method could compare someone who has a student loan and a car on finance, but lives comfortably in a society with good infrastructure and access to healthcare, with someone who has no debt but may live in a society where basic resources are scarce and living conditions poor, and see the former individual's debt as a major factor in the estimation of their wealth? (21 January at 12:29)

I was getting complacent now, and started waving my hands:

That's right. Non-marketable wealth (mainly learned skills and pension rights) is distributed less unequally than marketable wealth (that you can transfer by sale). Income is distributed less unequally than wealth, and consumption less unequally than income. Lifetime wealth, income, and consumption are distributed less unequally than any of these at a moment in time. They all matter, but differently, and it doesn't mean that inequality is not a problem. India has 20 percent of the poorest people in the world in the Credit Suisse table and very many of these truly have little or nothing and may never have more. (21 January at 14:15)

Not long after that I was thrown into a panic by cousin #4:

Radio 4, More or Less trailer have just said they will be discussing this stat 16.30 tomorrow, if you're interested. He seemed to hint at a similar (though less informed!) thing to Mark … (21 January at 17:33)

And by cousin #5:

I just heard the same thing on PM and came here to say what you said! (21 January at 17:38).

Cousin #4 again:

Haha - great minds! (21 January at 17:39)

Me (panicked, trying to be cool):

Great I'll try to listen. Thanks for the tip. Hopefully they've found some real experts! (21 January at 17:40)

The next day I listened, anxiously. Would Tim Harford show me up? Tim Harford, who presents More or Less, is one of my heroes, and More or Less is a great public service. My own small part in a recent episode was the acme of my career. On this occasion, the real experts did not contradict me. I lived to fight another day.


January 01, 2016

Supplying Hatred

Writing about web page https://www.facebook.com/groups/2358386395/

It all began with this:

Most hated PM

The image originated on a facebook page called “I hate David Cameron.” Then it was shared around until one of my friends liked it. So, on Christmas Day in the evening, it appeared on my facebook home page.

Things like this present me with a social dilemma. I want to keep facebook for friends and family and so I try to stay off politics. However, others don’t. When something like this pops up, I want to respond. Mostly I don’t, but I can’t help thinking to myself that nasty things take over the internet when nobody speaks up against them. So, from time to time I make an exception. This was one of those times. I waited until the original posting had some likes and approving comments and then I stuck my oar in.

Here’s how it went. The characters other than me are F (my friend), FOF (friend of my friend), and other random people whom I’ve labelled X, Y, and so on.

F and 11 others like this.

Comments

X: I disagree. He is not smeling of roses by any means, to put my views politely, but Thatcher was even worse! (26 December at 13:21)

FOF: She's where it all started in the UK. (26 December at 13:40)

X: For our generation, for sure. (26 December at 13:41)

FOF: And RayGun in the USA. (26 December at 14:04)

Y: He does have one of those faces you'd like to slap. Over and over and over and... (26 December at 14:08)

Y: Cameron is still Thatcher in drag (26 December at 14:09)

Z: Thatcher / Cameron. Its a close-run thing. But be prepared for PM Osborne. We have seen nothing yet, I'm afraid (26 December at 15:40)

Me: A shame that the hate speech factory could not observe even a Christmas truce. (26 December at 17:43)

FOF: I don't think that Cameron et al stop for Christmas. (27 December at 02:25)

Me: Yes, but that's not the point. The point is that it shouldn't be normal to spread hatred of anyone for what they are, for their colour or religion or politics or whatever. At Christmas or any other time. (27 December at 12:21)

Z: It should not be normal to blame the previous government for everything. Soon the floods will be Labour's fault, to the Tories. (28 December at 20:14)

FOF: Perhaps I'm not a Christian. (29 December at 13:08)

FOF: or perhaps I am. Would Christ have stopped admonishing wrongdoers just because it was a particular date ... a particular time of year? ... 'Oh. I'd better not throw the moneylenders out of the temple today because it's Channukah.'? (29 December at 13:12)

Me: That's not the point (again). Criticize all you want, but spreading personal hatred of the people you disagree with is wrong. You don't have to be a Christian to know wrong from right, any time of the year. (29 December at 15:29)

FOF: Sorry Mark, no, the statement is not a statement of hate. It is a statement regarding David Cameron and an opinion about him which is only challengeable on grounds of accuracy. The timing of the statement is irrelevant, Christmas, Holi, Purim....etc. (29 December at 15:45)

Me: Now you're being disingenuous. If you were just trying to educate us,, you'd share your sources (and you'd explain how we know how many people hated the prime minister before opinion surveys existed). That's not how it is. You have a partisan goal, which is to push the idea that Cameron is uniquely hated and the idea that political hatred is OK. (29 December at 20:45)

That’s where the conversation stands today.

Just to be clear on a couple of points: First, I’ve got no objection to political commentary, to discussing a politician’s character, or to strong feelings. It’s at the spreading of hatred that I draw the line. I draw it there for both moral and philosophical reasons. The expression of hatred against a person or a group amounts to expelling them from our moral community. It's a step on the road to collective violence.

Hate speech has interested me since I read Ed Glaser’s classic Political economy of hatred in the QJE (2005). Glaser describes a market for hatred. In the market there is a demand and a supply. The demand is stimulated when a society experiences a collective setback and demands explanation. The merchants of hatred are those that identify scapegoats and offer them as objects of hatred. The story often has a bad ending.

One of the interesting things about social media is that it becomes fairly easy to trace the supply chain back through the intermediaries to the originators of the supply of hatred.

Of course there are much worse examples than this one, especially where the victim does not have the social defences of a David Cameron. I picked this one only because it came up between friends.

And second, Robert Walpole was prime minister in the eighteenth century. But what’s a couple of centuries among friends?

A happy, hate-free New Year to my readers.


December 03, 2015

Whose Blood, Whose Hands?

Writing about web page http://www2.warwick.ac.uk/fac/soc/economics/staff/mharrison/comment/lives.pdf

Yesterday the House of Commons voted to extend the zone of British combat operations from Iraq to Syria. The debate--I watched some of it--was prolonged, intense, and mostly respectful. This morning I woke to find the tag #bloodonyourhands trending on facebook and twitter, as opponents of the decision rallied against the Labour MPs who swung the decision.

This made me think of a short piece I wrote after 9/11, at the beginning of the war against al Qaeda in Afghanistan. Called "Lives Lost and Lives Saved in the War Against Terrorism," it tried to address the issues that will quickly arise once more as RAF missions make their mark on the territory now occupied by the "Islamic State." Its message seems as apposite now as it was then. Dated 2 January 2002, it belongs to the era before I had a blog, so I'll reproduce it below. If you prefer to see the original, you'll find it here.

A first unofficial summary of innocent civilian deaths resulting from American bombing in Afghanistan, just published, estimates their number at approximately 3,800. Coincidentally the official estimate of deaths in the September 11 attack on the World Trade Center has just fallen below 3,000. Let’s assume for the sake of argument that these figures will stand the test of time. Taking into account the 800 or so deaths at the Pentagon, the total of September 11 victims now stands at the same level as the number of victims of the American response. How should they affect our view of the war against terrorism?

Some will argue from such figures that the war should now stop, or should never have been begun. The action against the World Trade Center was a terrible crime. But if the counter–action has now taken as many lives as the action that prompted it, how can more be justified? Surely the counter–action should now come to an end, whether or not it should have been begun in the first place.

Such thoughts are rightly troubling, but need to be put into perspective by considering the purpose of warfare that they imply. The argument that the war should now stop, since it has cost as many lives as the cause of the war, implies that a purpose of the war was to take a life for a life, in other words to exact Old–Testament retribution. It implies that, as long as the victims of American bombing were outnumbered by the dead of Manhattan, a continuation of the war was justified; now that the piles of corpses on each side are evenly balanced, the war should stop. If revenge is a bad reason for making war, then the war should never have been begun.

A specific historical parallel is to be found in World War II. Germany began the bombing of British cities in 1940, and German bombing eventually took 60,000 British civilian lives. The subsequent Allied bombing of German cities took 300,000 German lives — five times as many. Following the same lines of thinking as for the war in Afghanistan, it may be asked whether the taking of life by Allied bombing in World War II was either disproportionate or morally wrong in itself.

Another purpose of warfare may be not to take lives but to save lives; killing may not be an end in itself but a means to this end. What was missed from the calculations above was the lives saved as a result of military action. For example the Allied bombing of German cities, although both bloody and in some respects misjudged, forced Hitler to devote extraordinary resources to air defence. By 1944 one third of German war production took the form of anti–aircraft guns and interceptor aircraft that were necessitated purely by the Allied bombing campaign. Thus, even though Allied bombing reduced the total of German war production by much less than anticipated, it profoundly affected its composition. It greatly reduced the supply of weapons to the German forces on the front line of battle, with the result that the Red Army in the East and the Allied invasion forces in the west had a much easier time of it. Tens, possibly hundreds of thousands of Allied lives were saved.

In a wider context it may be seen that many lives were lost in World War II so that other lives could be saved. How many lives were lost in total? The war gave rise to approximately 55 million premature deaths, of whom 20 millions were soldiers leaving 35 million civilian victims. Of the latter 32 millions were on the Allied side, mainly in Russia, China, Poland, and Yugoslavia, and 3 millions were on the Axis side, mainly in Germany. How many lives were saved? These are not exactly known but probably also numbered millions. Hitler’s plans for a colonial empire in the East envisaged an immediate reduction of the population just in the part of Russia to be occupied by 40 millions through starvation and resettlement. If the Thousand–Year Reich had been established throughout Europe, an endless flow of additional deaths would have resulted from Nazi occupation plans that combined economic exploitation with selective murder based on ethnicity, disability, and sexual orientation.

In the same way the war against terrorism has taken many lives, many of them civilian. However, if western inaction permitted terrorist organisations such as al–Qaeda to continue to flourish, other innocent lives would certainly be lost in the future as a result. In this context the idea of going to war to save lives sometimes goes under the heading of defending the “right to life”. If we did not go to war in defence of the right to life some people would presumably die as a result and many more would live in fear, so the lives saved by going to war measure the value of defending this right.

Accounting for lives lost and lives saved in this way gives rise to three moral problems. First, the lives saved by military action are uncertain and anonymous. Lives saved are just statistics. In contrast every life lost is a precious individual who is personally identifiable, for whom friends and communities grieve, and whose families can hire lawyers. The lives saved are just as real but no one person whose life has been saved is individually identified. As a result there is no elected representative, victims’ lobby, or publicity agent to speak for them. For the same reason it can rarely be established that more lives were saved than were actually lost. For example, it is possible that a failure to resist Hitler would have cost more than the 55 million lives lost in World War II, but it cannot be proved. The same must be true of a failure to resist Osama bin Laden.

A second problem is that military action destroys many lives without apparent justification. In war it is usually difficult or impossible to show that it was necessary to take any one individual’s life in order to save another. Wars are intrinsically fraught with mistakes and opportunistic actions. The people making the combat decisions are always trying at the same time to serve the interests of the war effort and their own self–interest, which means their careers, their pockets, or their own survival. They make stressful decisions based on incomplete information while tired, hungry, or frightened. These decisions have lethal consequences for others as well as sometimes for themselves. This means that many lives are lost for reasons that not immediately connected with ultimately attainment of the war’s objectives. In a statistical sense all the deaths are a necessary accompaniment to the conduct of a war, yet many individuals die for no better reason than that a soldier blinked, jumped, or looked for excitement or a medal.

A third problem is that balancing lives saved against lives lost creates injustice. The lives lost and saved belong to different people. Two groups of innocent people are involved. The first group is of those whose lives are saved by military action. The second group is of those whose lives are taken by it. At first sight this is a problem familiar to economics. There are many situations in which a particular change, for example, in technology or social organisation leaves some people with a gain and others with a loss. If the gains outweigh the losses it is possible, at least in principle, to organise government taxes and benefits so that the winners compensate the losers out of their gains and still have something left over: everyone is better off as a result. In the case of war the group that lives gains at the expense of the group that dies. However, no compensation is possible.

It is sometimes suggested, incidentally, that the unfairness is still more grotesque when conditions of life are taken into account. For example the war in Afghanistan has taken the lives of some of the poorest people on earth in order to defend the lives of some of the richest. In my opinion, however, this is a red herring: the unfairness would not be less if rich people were being killed to save poor people.

The unfairness involved in who lives and who dies may also be seen in terms of another familiar economic problem: a conflict between equity and efficiency. It was deeply unfair that innocent people in Afghanistan with very little to start with should have been faced with the destruction of what little they had, including even their lives, just because a foreign terrorist organisation had made an evil pact with their unpopular rulers and settled among them. However, it was efficient to offer the Afghans powerful incentives to get rid of Osama bin Laden and the Taliban, and the incentives had to be negative ones. The ability of the United States to offer positive inducements was limited while the Taliban remained in power, and besides the wisdom of rewarding those whose rulers behave badly may be doubted in terms of the precedent it may create. Probably negative sanctions enforced by external military intervention were the only way of ensuring that the Afghans themselves would destroy the Taliban regime.

In short, the logic of military action requires us to trade some people’s lives against others’. For those who are willing to do so, the war against terrorism may be justified if it will have saved more lives than it takes away. This seems possible given what we know now about the ambitions of Osama bin Laden, although it cannot be known for sure. Sceptics may retort that much of what we know now about the plans of al–Qaeda was not known on September 12 and cannot be used to justify decisions taken then. The same was also true in World War II: that war was not waged to prevent or punish Hitler’s plans for ethnic cleansing in eastern Europe, since he set about them only during the war and took considerable care to keep them secret. But that’s what history’s like: most of the time, most of us live it blindly, and we find out what it was all about only after the event.



Mark Harrison writes about economics, public policy, and international affairs. He is a Professor of Economics at the University of Warwick. He is also a research fellow of Warwick’s Centre on Competitive Advantage in the Global Economy, the Centre for Russian and East European Studies at the University of Birmingham, and the Hoover Institution on War, Revolution, and Peace at Stanford University.



Economics Blogs - BlogCatalog Blog Directory

Mark talks about why and how he blogs on Warwick’s Knowledge Centre.

Search this blog

Blog archive

Loading…

Tags

Most recent comments

  • My mother sometimes asks me this question – how did we pay for the war? The answer is we didn't pay … by Hugo Evans on this entry
  • Anders: "It seems fair to assume that the Spitfire funds reduced £ for £ the public's discretionary … by Mark Harrison on this entry
  • Gary – "bias"; "poor thinking"? Must you be so patronising right off the bat? The £13m funds which t… by Anders on this entry
  • @Anders @Gary Ditto for the "lowered inflation" claim. Gold standard had been suspended and govts ra… by Arturo on this entry
  • @anders, Why do you assume non–government spending would have been higher? That's just your bias. Po… by Gary on this entry
RSS2.0 Atom
Not signed in
Sign in

Powered by BlogBuilder
© MMXVI