Tag Archives: economics

Sunday Links

Teju Cole wrote a story for Twitter. A Piece of the Wall explores the desert spaces between Mexico and the United States and the ugly discourse around immigration; the direct and concise nature of the medium makes it all the more powerful. Cole talks about the piece here (H/T for both links to Tom from A View from the Cave).

***

I’ve been exploring Chris Blattman’s excellent advice for development students: Ten Things I Tell Undergraduates is a good place to start, but check out the sidebar for a wealth of helpful information.

***

Bill Easterly wrote The New Tyranny for Foreign Policy, based on his latest book, The Tyranny of Experts. I’m three chapters in, and so far its been a stimulating look at the history of ideas about development, and the conditions that make a paternalistic, rights-negating approach to development possible.

***

This is an old one but required reading: How To Write About Africa, by Binyavanga Wainaina.

***

On the state of economics: Michael Sandel calls for more explicit engagement with political philosophy in Market Reasoning as Moral Reasoning. I think his argument is compelling. Dani Rodrik’s What is Wrong (And Right) in Economics is a reminder that many economists are already engaging in these kinds of questions.

***

On Venezuela, A Historic Low for El Nacional seems like a fairly innocuous story but is, I think, tremendously significant. Fans of liberal democracy find it easy to sympathise with the Venezuelan opposition. This is a timely reminder that elements of the opposition are as sensationalist, populist and closed off to genuine dialogue as the chavistas. 

Quote

…a tyranny probably worse …

…a return to “free” competition means for the great mass of people a tyranny probably worse, being more irresponsible, than that of the State. The trouble with competitions is that somebody wins them.

— George Orwell*, criticising Hayek

I seriously cannot wait to bust this out the next time somebody tells me I need to brush up on my Orwell because I’m arguing for limitation of economic freedom.

And watch their head explode.

*  in Collected Essays, Journalism and Letters (1970), cited in Funnell, W (2001) Government by Fiat: The retreat from responsibility. Sydney: University of NSW Press. p. 53.

Carbon Pricing in Australia: The Creeping Red Threat

a43aec536d26d8488ebcd107e02ab57907dc2c1a8a1b3a184bfa923a0a04ccb9

Tony Abbot has described the Carbon Tax thusly to the Tasmanian Liberal Party conference:

“Let’s be under no illusions the carbon tax was socialism masquerading as environmentalism”
— From ABC News, emphasis mine.

Ah yes, that age-old socialist policy prescription of using price signals to attempt to correct negative externalities in the market.

The creeping red threat is even apparent in the highest echelons of the Australian economics profession, with thirty of 35 economists surveyed by Fairfax supporting carbon pricing and emissions trading schemes over direct action (or no action). The bias towards socialist policy is being instilled in our undergraduates:

BT Financial’s Dr Chris Caton said any economist who did not opt for emissions trading “should hand his degree back”.
— From Sydney Morning Herald

And that bastion of International Socialist Thought, The Economist, has also come out in favour of carbon pricing, even attempting to import our previous government’s socialist measures into its home economy:

“The supposedly left-wing Ms Gillard, even allowing for her handouts, is making price signals central to Australia’s carbon plans. If only Britain’s supposedly free-market government would do the same.”
— From The Economist, emphasis mine

But never fear, the Liberal Party are here to stop the slide and return us to free market orthodoxy by … directly paying for emissions reductions.

(Jamie Hanson puts it even better over at New Matilda)

What I’ve Been Reading: Friday, 1 June

I’m sitting in a hotel lobby in Montevideo where an elderly uruguayo is playing the piano: it’s all very civilized. I came for a conference run by CADAL on the business climate in Latin America, but I’ll write about that another day. For now, there’s a new city to be explored and a bus to catch this afternoon – I’m heading to Maldonado tonight and Punta del Este tomorrow – so I’ll limit myself to a roundup post.

Foreign Policy’s A Giant Among Giants profiles Glencore, the enormous commodities firm few had ever heard of until its IPO in May 2011. It was founded by Marc Rich, “a defiant friend of dictators and spies who later became one of the world’s richest fugitives” (until his controversial pardon by Bill Clinton). The business culture seems highly toxic and corrupt, its firm’s connection more than a little suspicious. Still, I thought the final quote was interesting:

[L]ike all good businesses, even Glencore has to keep up with the times. Marc Rich seems to agree. “Discretion is an important factor of success in the commodity business,” he told an interviewerwhen Glencore announced it would go public. “They probably don’t have a choice. Transparency is requested today. It limits your activity, to be sure, but it’s just a new strategy to which they have to adapt.”

Is there really much sense sitting around wringing our hands over poor corporate behaviour? Business as a rule operates according to the profit motive, in the context that is provided. It’s up to society at large to put the limits on this behaviour. If we don’t put down the limits, should we be surprised at the results? Well-thought out and sensible regulation – and a society-wide demande for ethical products and services – won’t kill capitalism: it’ll find a way to adapt.

Nevertheless it is terrifying to think of the money and power wielded by commodities firms – those that control the raw materials we need for, like, everything.

Still on the business theme, The Nation’s The Rise of Benefit Corporations is a brief introduction to a new corporate form that has been written into law in certain American states. I haven’t had a chance to read a whole lot about these benefit corporations but I find the idea compelling if a little utopian.

As one of those people guilty of using the developing world label without the quotation marks I read and was shamed by Jay Ulfelder’s post There are two kinds of countries in the world: ___ and ___It’s an interesting debate. On the one hand, any meaningful analysis needs to draw on some method of grouping and classifying the things under discussion. On the other, each classification system we use draws on certain assumptions and determinations of “value”. I like to think I use the developing country tag well aware of the inherent problems with it, but by doing so am I perpetuating the unfair judgements it draws on?

The New Yorker published a profile on William Alexander Morgan, The Yankee Comandante. I had no idea he existed. This is a great read, and an illustration of that tragic moment in which the beautiful dream of the Cuban Revolution began to fall apart.

We’re experiencing ever stricter dollar controls in Argentina: it breaks my heart to withdraw pesos from my bank account in US dollars – ATMs no longer offer the option to withdraw in dollars – at the official rate of around 4.4 when the “blue dollar” is going for 5 pesos and up. (The blue dollar is the black market dollar. I don’t know why its called blue either). I have considered withdrawing dollars here in Uruguay and smuggling them back into Argentina in my underwear but dollar-sniffing dogs are likely to be at the border, and I can’t really criticise the Latin American propensity to bend the law and then smuggle dollars myself. The Economist summarises here.

I will spare you links to the reports on Australian Government budget transparency, the subject of most of my reading this week as I prepare a report on the topic for work. That’s OK. You can thank me on twitter.