Saturday, July 13, 2002


Pipe Bomb Critically Hurts Man in D.C. Garage (


This pipebomb explosion occurred just as I was leaving to pick up Noah from Summer Camp. I didn't hear anything, but I sure saw the reaction. All the streets around ours were being blocked off as I headed towards Wisconsin Ave. and then on down to Georgetown. Had to pull over several times to let hurtling police, ambulance and fire fighters through (bloody government services). Heard on the radio that the Mazza Gallerie, a stone's throw from our back door, was being evacuated and traffic was being stopped between Jennifer and Western, the precise blocks that bound our house.

Of course you think terrorism. Same time I did every time a train was late or stopped on the Underground in London. But it wasn't, apparently: just poor kid who's dad is big in insurance and who was probably the intended victim of a bomb placed in his car.

Given the level of response - there must have been twenty police cars and a six fire engines and ambulances (bloody government) - I'd guess the authorities also presumed terrorism. (Apparently the whereabouts of Dick Chaney is still unknown, so I guess he did too.)

Anyway, by the time I was driving back home with Noah onboard, the streets were still blocked and I couldn't get to our house, so I parked and we walked. I asked a cop what was going on and he said he didn't know, with great authority.

Wasn't until this article in today's paper that I found out the story.

We wandered down there this morning, on our way to Cafe Cafe, and there were still news crews poised at the sealed-off entrance to the underground carpark where it happened. Just standing around, waiting for...what? What a ghoulish occupation, I would imagine.

Friday, July 12, 2002



George Orwell might have named the practice--doublethink, newspeak--and may have even fictionalised it nicely in 1984; and Bill Clinton may have asserted some authority in the art when testifying over the Lewinsky affair--especially the bit that went "it depends what your defintion of is is"; but when it comes to contemptuous political misuse of language and power, Donald Rumsfeld is the real McCoy. This from a press conference given in Brussels:

The message is that there are no "knowns." There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don't know. But there are also unknown unknowns. There are things we don't know we don't know. So when we do the best we can and we pull all this information together, and we then say well, that's basically what we see as the situation, that is really only the known knowns and the known unknowns. And each year, we discover a few more of those unknown unknowns. ...There's another way to phrase that and that is that the absence of evidence is not evidence of absence.


The Great Awakening (

Having written earlier about how some people seem to think death is optional (see FROM THE DEATH IS OPTIONAL FILES, 11 July 2002 below) we now find a milder version of a similar, and I suspect, equally mythical idea - that sleep is optional.

Those of us on the road to surfdom generally approve of sleep, especially a good's nights worth, whether you get it in the middle of the day or the night or whenever, and we also like naps and snoozes and saunas and dozes and sunbathing and moonbathing and rest. But we also like the idea of pulling all-nighters, of sleeping when we are dead (so to speak), of over-indulging in wakefulness, whether it is in pursuit of the end of a book, a good idea for a novel that we just had, or another set of waves on Avalon Beach.

So I have mixed feelings about this new drug, modofinil (aka Provigil) which allegedly can keep you awake and coherent for up to 40 hours.

In trials on healthy people like Army helicopter pilots, modafinil has allowed humans to stay up safely for almost two days while remaining practically as focused, alert, and capable of dealing with complex problems as the well-rested. Then, after a good eight hours' sleep, they can get up and do it again -- for another 40 hours, before finally catching up on their sleep.

Originally aimed at narcoleptics, who fall asleep frequently and uncontrollably, modafinil works without the jitter, buzz, euphoria, crash, addictive characteristics or potential for paranoid delusion of stimulants like amphetamines or cocaine or even caffeine, researchers say. As with an increasing number of the so-called superhuman, posthuman or trans-human drugs or genetic manipulations rapidly entering our lives, modafinil thus calls into question some fundamental underpinnings of hundreds of thousands of years of thought regarding what are normal human capabilities.

The temptations for misuse are staggering, especially if placed in the hands of certain strains of capitalist employers who already demand long hours from their workforce. They wouldn't need to do anything more than they are already doing, namely demanding long hours of work, and pretty soon their workers will be tempted into this option. According to the article, it's already happening.

Or imagine it slipped into the drinking water down at Camp X-Ray.

I don't know - the thought I could've got the PhD done in two years instead of three is attractive, but who knows what the real price would've been? I could imagine using it every so often, just to get some work done, but I doubt if it would really make much difference: I'd have the same will-power problems, I'd just be awake longer wrestling with them. Or imagine the advantages for new parents trying to get used to and control the sleeping patterns of their new-born baby.

And I'm hardly encouraged by this:

Nonetheless, modafinil (pronounced mo-DAF-i-nil) is distinguished by its apparently precise neurological focus. Nobody knows exactly how modafinil works, but researchers marvel at the way it seems to target very specific regions of the brain believed to regulate normal wakefulness. It's that narrow effect that is lacking in other stimulants, resulting in their notorious side effects.

Surely the truth is, if we didn't have to subject ourselves to the imperatives of marketplace work schedules, productivity curves and the demands of balancing the life we want to live with the life that supports it, we wouldn't need such a drug.

So for those rare few who have reached surfdom, the drug is no doubt a redundancy. For the rest of us who are merely on the road, it might have its uses.

Thursday, July 11, 2002

The Australian: Foreign fields unearth new PM [July 12, 2002]

The Australian: Foreign fields unearth new PM [July 12, 2002]

Rather mawkish piece by Dennis Shahahan of The Australian getting all soft over Howard shedding a few tears in Europe. I don't doubt either Shanahan's sincerity or in fact Howard's, but the argument doesn't cut it, I'm afraid.

It is precisely the fact that Howard is apparently able to be moved by things that matter to him--especially if they have personal connection--but is singularly unable to be moved by the plight of those different and remote from him--such as Asian refugees, Indigenous Australians, or even children locked in desert detention centres--that makes many of us doubt the depth of his compassion. I'll be willing to join Shanahan's endorsement when I see the PM moved to tears by the plight of those foreign to his experience and not just those to whom he can easily relate.

He may be out of "politician" mode but he would be well aware of the poltitical value of this:

Standing beneath the Menin Gate as Belgians spoke of Australia's sacrifices, he talked about his father and grandfather and showered the crowd with heart-shaped Flanders poppies. Howard was moved to tears and later spoke of tears in his eyes and a lump in his throat as he recalled the deaths of so many Australians, so long ago and what they now meant to so many young Australians who travelled – with Aussie flags invariably draped over their shoulders – to Gallipoli, France and Belgium.

So don't give me this shite about a "new PM".

In fact, I think I dislike him even more, the more I think about this article.


From Finance and Development Magazine, a quarterly put out by the IMF, Professor Angus Deaton (not the British comedian, former member of the Hee Bee Gee Bees, I presume), throws a nice spanner into the works and excites a bit of inter-institutional rivalry between neighbours on 19th Street here in Washington DC, the IMF and the World Bank:

The first table of the World Bank's World Development Report 2000/2001: Attacking Poverty shows that the number of people living on less than $1 a day grew from 1.18 billion in 1987 to 1.20 billion in 1998—an increase of 20 million. Less than two years later, a headline chart in another major World Bank publication, Globalization, Growth, and Poverty: Building an Inclusive World Economy, showed that the number of people living in poverty fell by 200 million from 1980 to 1998 and showed no trace of an increase between 1987 and 1998. The poverty decrease was reaffirmed in the press release accompanying "The Role and Effectiveness of Development Assistance," a World Bank research paper issued before the March 2002 UN Financing for Development Conference in Monterrey, Mexico: "Over the past 20 years, the number of people living on less than $1 a day has fallen by 200 million, even as the world's population grew by 1.6 billion."

You might remember from earlier discussion of Kraay and Dollar's article in Foreign Affairs (see entry If the poor could survive on arguments about the level of poverty there would be no poverty from July 10) that they relied heavily on World Bank figures to support their claims of a reduction in inequality (or was it poverty?).

As Deaton points out--and this is the whole reason for the lengthy pursuit of the topic on this blog:

Getting an accurate poverty count is important. The Bank sails under the banner "Our dream is a world free of poverty," which not only invites the use of the poverty count as a measure of the extent to which the dream is being fulfilled but also raises the issue of whether the organization's success can be convincingly measured by its own numbers. We also need an accurate poverty count to assess whether the international community is achieving one of the Millennium Development Goals endorsed by 189 countries at the September 2000 UN Millennium Summit—to "halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day." A lot depends on whether the scorecard is being credibly tallied, and the apparent discrepancies in the Bank's numbers deserve serious scrutiny.

Much further into the article, but relatedly, he notes:

Since they were first calculated in 1987, the $1 a day poverty counts have been based on direct observations of what poor people earn or consume, using the several hundred income and consumption surveys that are now available to the Bank. This statistical advance is what makes it possible for us to have a serious debate about what is happening to poverty in the world. And it is clear that the Bank's best economists do the calculations to the highest standards, and there has never been any suggestion that the counts are anything other than what the data show. But as the case of Attacking versus Globalization shows, it is possible for these underlying data to be used in ways that seem to support very different factual statements about trends in world poverty.

Which is a bit of problem, one would think.

Using the example of India, he notes that it had "historically high" growth in the early 1990s and that this was also the time of a degree of economic "liberalization" (I'm trying not to be causal prematurely). What he asks is this: But did this growth help or hurt the poor? Were their numbers reduced or did economic growth benefit only an increasingly wealthy urban elite?

This is where it gets interesting. As he points out:

The political debate has been fueled by questions about the accuracy of poverty measurements in light of the discrepancies between estimates of consumption growth based on national accounts statistics (NAS) and those based on household surveys carried out by the National Sample Survey (NSS). According to the NAS, real per capita consumption has been growing at about 3.2 percent a year since the reforms, while, at least until recently, the NSS data have shown little or no growth throughout the 1990s.

As I've already suggested, and as should just be our working understanding of how such debates are conducted, Deaton points out that different groups will use the different data according to how well it suits their prejudices: Reform opponents resolutely quote the NSS data, while reform advocates back the NAS growth estimates, questioning the accuracy and the integrity of the NSS data and arguing that, because the poor's share of the national pie is more or less fixed, growth must reduce poverty.

Doesn't anyone, other than those on the road to surfdom, just want to know the truth????

I'll continue this later, from this spot, when I have a bit more time...............



The Institute for Social Research at Swinburne University of Technology in Melbourne has recently put together this excellent portal site.

Of themselves they say:

Locating reports and other research material on Australian social and cultural policy can be difficult and time-consuming. Australian Policy Online (APO) aims to change all that. With over fifty member centres and institutes, APO offers fast access to much of the best Australian social, economic, cultural and political research available online. We're maintained by the Institute for Social Research at Swinburne University of Technology. To learn more about our member organisations, visit our Members page.

Reports and other new material from our members are archived within our Topics pages, which are arranged in sixteen subject areas, from health and education to cities & suburbs and the environment. Our team of guest writers and columnists weigh in on issues of the day within the pages of Comment and Analysis, while the Debates section offers updates and links to resource pages on key policy discussions.

Complementing our members' research, APO's Best of the Rest provides links to important new material from a range of sources, including newspapers, the broadcast media and government.

To receive notice of new material at APO, as well as job openings, events, and other notices from Australia's public policy research community, subscribe to Weekly Briefing, our free weekly email newsletter. Simply enter your email address in the box on the left of your screen.

If your organisation is interested in becoming a member of APO, please drop us an email or send us a line.

I've been following them for a few weeks now, and they are collecting and collating some good stuff. I've put a permanent link in the links box. Definitely worth checking out.

Stratfor is a well-regarded, conservative observer of international events - hardly raving lefties by any stretch, n'est pas?

In this report they specifically link the US policy of llap goch diplomacy (for all you Python fans) in Iran and Afghanastan with the need for oil, not the need to root out terrorism.

U.S. strategic planners see two specific reasons to depose Saddam. First, Iraq's chemical, biological and nuclear weapons programs threaten the balance of power in the Middle East. Officials in Washington also fear that those weapons someday could find their way into the hands of al Qaeda. This argument is based on logic and potentiality rather than evidence, but the consequences of such a development would be so terrible that the argument must be given credence.

The second reason involves oil. Iraq has huge reserves of crude, and gaining control over those resources would greatly enhance U.S. energy security -- and give Washington considerable leverage over other oil producers, such as Saudi Arabia and Iran. The governments of both countries absolutely depend on oil revenues to maintain domestic stability, and both use their reserves as leverage when negotiating with the United States and the rest of the world. For example, Saudi Arabia's oil reserves are a big reason that U.S. military forces are chasing al Qaeda in western Pakistan and not in western Saudi Arabia.

I rather like the line in that first para, about "this is based on logic rather than evidence". On this basis I declare Peter Reith guilty of misleading everyone about the unthrown children.

Anyway, the telling line is the oil explanation they offer for "chasing al Qaeda in western Pakistan and not in western Saudi Arabia" .

Your average lefty daring to spout such a hereticism would be turned upon mercilessly.

In fact, the whole piece is just about description of the nature of US hegemony, the only difference being the source.


Cryogenics are back in the news here. Seems some famous baseballer, Ted Williams (pardon my ignorance) has died and his family are fighting over whether he should be cryogenically frozen or not. As you do.

Anyway, the NYTimes mentions the company involved, the Alcor Life Extension Foundation (incidentally, given their fees, how'd they get a .org domain?) and references their website which includes this wonderful comment:

With the many advances in modern science, such as: DNA mapping, stem cell research, therapeutic cloning, human genome studies, and the emerging discipline of nanotechnology, the possibility of living a longer, more productive life even following the event we now refer to as "death," is becoming more realistic with each passing day.

I just love that "event we now refer to as death" comment. I can see the Grim Reaper forlornly riding around in the post-cryogenic world, doing talkshow appearances and being introduced as "the horseman formally known as death".

Wednesday, July 10, 2002



One of the great discoveries since moving here has been The Daily Show, a kind of hipper version of Leno and Letterman, with a smaller audience to match. (Actually, I like Leno, though Letterman shits me up the wall). While The Daily show does do an interview with 'someone famous' every night, it is mainly a series of skits and piss-takes on the news of the day. It is also a lving refutation of all those (the rest of the world) who think Americans lack irony.

Anyway, they absolutely excelled themselves the other night when they covered the news that the Supreme Court had ruled in favour of not executing retarded people. Unfortunately, they don't put transcripts online, but they did put this extract. Of course, you have to imagine host Jon Stewart's faultless, incredulous delivery, but you'll get the basic idea:

Just in time for national "Holy crap, we still do "what"?" day, the Supreme Court voted 6-3 Thursday that states may not execute the mentally retarded...The ruling represents a major victory for anti-death penalty forces and supporters of the mentally disabled inmates, but comes as a severe blow to supporters of...executing retards?

And while on a lighter note, great cover for The Nation last week. A cartoon of Bush saying: "I did not have comercial relations with that corporation."



Greg Sheridan is all excited about seeing a few signs of home during his current trip to the US. I know quite well that feeling of seeing 'things Australian', and how you get a bit flattered and bit surprised, especially when you don't really expect to see anything of the sort.

There is some truth in what he says, but he shouldn't get carried away - a tourist's impressions can be misleading, and the sorts of things he quotes (Foster's ads, Lleyton Hewitt in the newspapers etc) are liable to strike the Australian tourist but are fleas on an elephant in terms of American recognition of Australia, and are certainly no evidence of an American 'love' of Oz.

If he'd read a few more reports on Lleyton Hewitt's victory, for instance, he would have found a much more equivocal feeling towards the Wimbeldon champion, sometimes bordering on dislike - no doubt with memories of his performance in the US open, where he was accused (wrongly in my opinion) of making a racist comment. More than one story framed his victory as a boring interlude by a boring player between the natural resumption of dominance by the next wave of US players. It is this indifference to the Australian angle, and a feeling that nothing much matters unless there is a US presence, or preferably dominance, that is much more usual than the 'love in' Sheridan suggests.

Nonetheless, he is also right to say that Australia and Australians are held in higher regard here than in Europe and Britain, but this seriously downplays the relative levels of understanding between, on the hand, Oz and Britain and on the other, between Oz and the US. There is a much deeper knowledge of things Australian in the average Brit than there is in the average yank. When I lived there (1991-94) I was struck by how the BBC could run a story with a lead in like, "In Melbourne today..." with no further need to explain where Melbourne was. That just couldn't happen here in the US.

Similarly, everyone in the Wimbledon audience knew exactly what Hewitt meant when he said to Sue Barker in the on-court interview after the match, "this is a ripper", but watching the moment here in the US, we heard the US commentators, including John McEnroe, puzzling over the word and asking for an Australian dictionary. I get the same reaction here when I say "g'day" to people, though yer average pom is likely to say "g'day" back (depending what class position they occupy, anyway).

These are small examples, but you get the picture.

Still, our officials do get a weekly one-on-one security briefing that only two or three other nations get, and we had enough clout to get Howard a joint sitting of Congress to address, a rarer event than was generally credited.

But it's pretty small potatoes.

The free trade agreement will only come off--despite our vigorous and persistent lobbying--if the US can see an home advantage in it, itself probably the biggest risk we take in entering into one.

In geo-political terms, Australia is a newborn joey in the pouch of the American Kangaroo Kolossus, and while I'm glad Greg Sheridan is having a nice time here and is being suitably flattered, I wouldn't go extrapolating too much from what is probably just a bit of down-home hospitality. Those who go down this path tend to fall, as the PM did in his Congress speech, into wannabe mode, which is rightly interpreted as arse-licking in my book. (And speaking of the PM's speech, more on that soon)

Has anyone else noticed that George Bush's approach to reform of the corporate sector is awfully dang close to his approach to Osama bin Laden? I mean rhetorically. Consider this from yesterday's speech on Wall Street:

First, we will use the full weight of the law to expose and root out corruption. My administration will do everything in our power to end the days of cooking the books, shading the truth, and breaking our laws.

Key word is root. We were going to root out terrorists and now we are going to root out corruption. A war on corruption anyone?

If the poor could survive on arguments about the level of poverty there would be no poverty

Foreign Affairs magazine has recently run a biggish story by David Dollar and Aart Kraay arguing that globalisation has reduced poverty within and between countries. Unfortunately it isn't available in full online, but they do provide this 500 word summary:

David Dollar and Aart Kraay are economists at the World Bank's Development Research Group. The views expressed here are their own.


One of the main claims of the antiglobalization movement is that globalization is widening the gap between the haves and the have-nots. It benefits the rich and does little for the poor, perhaps even making their lot harder. As union leader Jay Mazur put it in these pages, "globalization has dramatically increased inequality between and within nations" ("Labor's New Internationalism," January/February 2000). The problem with this new conventional wisdom is that the best evidence available shows the exact opposite to be true. So far, the current wave of globalization, which started around 1980, has actually promoted economic equality and reduced poverty.

Global economic integration has complex effects on income, culture, society, and the environment. But in the debate over globalization's merits, its impact on poverty is particularly important. If international trade and investment primarily benefit the rich, many people will feel that restricting trade to protect jobs, culture, or the environment is worth the costs. But if restricting trade imposes further hardship on poor people in the developing world, many of the same people will think otherwise.

Three facts bear on this question. First, a long-term global trend toward greater inequality prevailed for at least 200 years; it peaked around 1975. But since then, it has stabilized and possibly even reversed. The chief reason for the change has been the accelerated growth of two large and initially poor countries: China and India.

Second, a strong correlation links increased participation in international trade and investment on the one hand and faster growth on the other. The developing world can be divided into a "globalizing" group of countries that have seen rapid increases in trade and foreign investment over the last two decades -- well above the rates for rich countries -- and a "nonglobalizing" group that trades even less of its income today than it did 20 years ago. The aggregate annual per capita growth rate of the globalizing group accelerated steadily from one percent in the 1960s to five percent in the 1990s. During that latter decade, in contrast, rich countries grew at two percent and nonglobalizers at only one percent. Economists are cautious about drawing conclusions concerning causality, but they largely agree that openness to foreign trade and investment (along with complementary reforms) explains the faster growth of the globalizers.

Third, and contrary to popular perception, globalization has not resulted in higher inequality within economies. Inequality has indeed gone up in some countries (such as China) and down in others (such as the Philippines). But those changes are not systematically linked to globalization measures such as trade and investment flows, tariff rates, and the presence of capital controls. Instead, shifts in inequality stem more from domestic education, taxes, and social policies. In general, higher growth rates in globalizing developing countries have translated into higher incomes for the poor. Even with its increased inequality, for example, China has seen the most spectacular . .

Even though this is all you get online, they do at least publish three responses in full, and then a response to the responses by the original authors, also in full.

The responses are interesting, but the whole argument about levels of poverty within and between countries--which I think is central to any discussion of 'globalisation'--is incredibly confused and difficult to get to the bottom of.

One of the respondents, James Galbraith, says this:

In "Spreading the Wealth" (January/ February 2002), David Dollar and Aart Kraay make the provocative claim that global inequality has declined since 1975, mainly due to rapid growth in India and China, and that "globalizing" countries have performed far better in per capita growth than "nonglobalizers."

It is extraordinary that India, China, and Vietnam should be offered as three of the five major examples of globalizing success stories. India's relative success began in the 1980s, partly because strict capital controls and long-term official development assistance helped protect it from the debt crisis that occurred in Latin America and elsewhere. China grew at first on the strength of agricultural reform and then through a program of industrialization financed mainly by internal savings; it has to this day not liberalized its capital account. Vietnam and China remain under the control of their communist parties; these are not "Washington consensus" countries by any means.

This is a point that needs to be made, illustrating as it does the bogusness of the term 'globalisation'. What do they mean by it? Galbraith too, is less than clear in his use of the term and seems to be implying that it means something along the lines of 'neo-liberal' reforms, including privatisation, deregulation, labor market 'flexibility' as well as an increase in international trade. But Kraay and Dollar (K&D) seem to mean something closer to just 'more international trade'.

They write in their response:

Our point is simply that countries that have become more globalized, in the sense of becoming more open to trade and direct foreign investment, have grown faster.

Both sides need to be clearer on this, though it isn't really the main point. We still don't know if poverty went up or down or stayed the same. In fact, the term 'poverty' is also a problem:

One of the other respondents, Andrew Wells-Dang, writes:

David Dollar and Aart Kraay's claim that "globalization ... has actually promoted economic equality and reduced poverty" is based on a selective use of data and dubious assumptions about causality. Indeed, their evidence remains far short of convincing.

To defend their views, Dollar and Kraay play fast and loose with the economics of inequality. The "mean log deviation" measure they use to claim a global reduction in inequality since 1975 is not a particularly good indicator. All it measures is the relative difference in distribution among the rich compared to the poor. To take an extreme example, a society with half of its members earning $50,000 and half earning $500 would have a mean log deviation of zero. Surely this is not what Dollar and Kraay mean by perfect equality.

K&D counter at least part of this effectively:

Wells-Dang is...incorrect to suggest that a country in which half the population earns $50,000 and the other half earns $500 would show zero inequality according to the mean log deviation measure of inequality we use. The correct figure is 1.6, which is roughly twice as high as the global inequality we measure.

But it doesn't answer the question fully, as K&D seem to think. Wells-Dang also points out:

[K&D]then proceed to confuse the issue of inequality with poverty reduction. It is indisputable that absolute poverty has declined dramatically in countries such as China and Vietnam following market reforms, and that millions of people are better off as a result. Nevertheless, relative inequality has risen just as dramatically, creating a host of social problems.

Surely this is a major point? (Even though notice that Wells-Dang use the expression 'market reforms' presumably as a synonym for 'globalisation'.) K&D overlook it, I think, because they don't really consider inequality a problem in itself. This is at the basis on the anti-egalitarianism of various third ways, especially the Giddens/Latham variety. And it is a whole other argument as to whether inequality matters or whether we should just be concerned about poverty, which I'll take up some other time.

So from K&D's article, it is hard to tell whether they mean globlisation has reduced poverty or inequality, and whether 'globalisation' actually means simply more international trade and foreign investment or if it means deeper sorts of neo-liberal reforms. My guess is that K&D mean both because they would obviously consider both desirable, though such a definition would again pin them under Galbraith's arguments that the examples they choose (China, India, Korea) don't really fit yer standard definition of 'neo-liberal reforms'.

On this point, the other respondent to K&D's article, Joe W. Pitts, adds an interesting morsel:

David Dollar and Aart Kraay's argument that globalization is a "powerful force for equality" is strange in light of widely accepted empirical evidence that inequality within and between countries has increased over the last 200 years. Although they claim that inequality has leveled off or started to decrease in the last two decades, the evidence on this topic remains unclear. To make their case, Dollar and Kraay rather arbitrarily classify a certain group of nations as "globalizers" and point to a decrease in inequality. However, as Harvard economist Dani Rodrik and others have pointed out, using more objective criteria (such as tariffs) for selecting the globalizers suggests that economic growth peaked in the 1960s and 1970s. Indeed, the latest World Bank report on globalization, of which Dollar was a principal author, backed away from the claim that the most globalized countries were those that had adopted the most protrade policies.

So why, as authors of a World Bank report do they say one thing, while as authors of Foreign Affairs (FA) article they say another? Is it the difference between fact and opinion? Is the FA article being used as an assertion of their membership of the 'pro-globalisation' club?

Anyway, without knowing whether they are arguing that poverty or inequality has decreased, we can't really judge the efficacy of the figures they provide.

And even if we could, the figures themselves are a real problem.

Galbraith says:

However, the source on which they base this assertion, the World Bank's inequality data set, is riddled with gaps and implausible measurements. According to these measures, for instance, inequality declined in Canada from 1971 to 1991 and in Mexico from 1975 to 1994, Spain is one of the most egalitarian countries in Europe, and India and Indonesia have general measures of inequality similar to that of Norway.

My own work, in contrast, shows a clear and severe global pattern of rising inequality in industrial pay, beginning in the early 1980s. This is based on the United Nations data that permit about 3,000 data points to be estimated, roughly five times as many as in the published editions of the World Bank data set (and more than three times as many as in a forthcoming edition).

Rising inequality after 1980 is the rule in this data, with limited exceptions mainly in Scandinavia and in Southeast Asia before 1997. The patterns strongly suggest that forces of globalization, including high global interest rates, debt crises, and shock liberalizations, are associated with rising inequality in pay structures. Pay is, of course, the major component of income, and if pay inequalities are rising, it is a good bet that broader income and social inequalities are rising too.

To this, K&D counter:

Second, the data used to measure inequality matter. There is only one comprehensive source of data on income inequality within countries: representative household surveys carried out by countries' statistical agencies. Although such data certainly have flaws, they are the best we have, and so we use them. Moving from comprehensive measures to narrow measures such as intersectoral pay differences in industry (as advocated by Galbraith in his letter) seems inappropriate for our purposes. In most developing countries, only a small fraction of income consists of wages in the formal manufacturing sector, and most poor people work in agriculture and the informal sector. So it seems unlikely that trends in manufacturing-wage inequality will provide a reliable picture of overall inequality trends, which are often dominated by rural-urban and regional income gaps (as is the case in China, for example).

Whether or not the narrow or broad figures are more appropriate (and you'd think you'd need both to get a proper picture, wouldn't you?), this doesn't really counter Galbraith's point about the unreliability of the figures they actually do use.

Pitts is actually willing to concede some ground, but again, the difference between poverty and inequality is key:

Globalization and progrowth policies do reduce poverty. But as competitive systems that produce winners and losers, they do not necessarily reduce the inequality that is increasingly visible in a globalized world. Policies such as greater and more effective foreign aid; investment in developing countries' education, infrastructure, and technological capacity; enhanced access to rich-country markets; and international financial reforms are also vital in achieving a more stable, just, and sustainable system.

But even within this, we might argue about which elements belong to a definition of 'globalisation' and which don't, and which should be considered liberal policies and which should be considered 'statist' or 'welfare' policies.

Still, Pitts's braoder point is worth considering:

Even if Dollar and Kraay had not made faulty assumptions in choosing their globalizers, their breathtaking conclusion that "greater openness to international trade and investment has ... helped narrow the gap between rich and poor countries rather than widen it" confuses correlation with causation. When average national income is examined, the fact that China and India have had higher growth and relatively fewer poor people distorts the picture because of the size of those two countries. In addition, higher growth in these nations preceded more open trade. Almost everywhere else, growth has slowed or (as in sub-Saharan Africa) reversed. Moreover, as illustrated by rising inequality within China and India, just because growth also raises the incomes of the poor does not mean that it reduces inequality, since the poor start from a radically lower position than the rich. Indeed, if incomes of both the rich and poor increase at a similar rate, inequality is increased, not reduced. Another study published in January by another World Bank economist, Branko Milanovic, evaluates household survey data, which is arguably a more relevant measure of inequality. This work shows that global inequality (as measured between individuals, with the world as one "nation") actually increased, at least in the five-year period examined (1988-93).

Inequality is no myth. According to well-known statistics produced by the World Health Organization and the un Development Program, the net worth of the world's richest 200 individuals exceeds that of the world's poorest 2.5 billion people. And if, as Dollar and Kraay acknowledge, 82 million of the 83 million people added to the world each year are in poor countries, global equality will not be easily advanced.

Again, it starts to look like an argument about authority or sources and whose you want to trust.

What is likely to happen, however, in more general debates about these matters, is that all these nuances of meaning and arguments about the reliability of data are going to be lost. Those for 'globalisation' will quote K&D at length, and will implicitly accept their data, probably with no examination of it. Those more sceptical of 'globalisation' will quote Galbraith, Pitts and Wells-Dang as refutation of K&D and others, with an equally negligible consideration of these matters.

Surely we have to go all Socratic and ask, is there a true answer? Because surely it matters if real people in the real world are living decent lives or might somehow have the possibility to thrive? More to come.

Did Atlas Shrug?

This headline and blurb from the Cato Institute:


In a feature story today, The Washington Post reports that as South Africa
struggles to both modernize its economy and combat a grave financial
crisis, South Africans are debating whether to do what no African nation
has ever done: create a welfare state. ( )

Promoted by a broad coalition of labor unions, churches, children's
advocates, the elderly, women, opposition politicians, and even AIDS
activists, a plan to provide each man, woman and child age 7 to 65 with a
monthly welfare check of $10 has dominated the political debate here this

In the book "A Life of One's Own," ( Kelley challenges the welfare state assumption that people have the
right to food, shelter, health care, retirement income, and other goods
provided by the government. He also explains that private charity is more

I know it's a cliche to say, gee, it's easy for some middle-upper class guy with food on the table every night and a roof over his head to argue that poor people in Africa and elsewhere don't need a welfare state and have no right to food and shelter, but if these fuckwits want to continue to run this sort of line, then I guess we just have to continue to indulge in cliche.

Click the link and we find that Kelley is of the Ayn Rand persuasion--what a shock--and that he has many people willing to endorse his clever insights into starvation and how it is not to be helped by giving people food unless you really want to. This is okay apparently, but for a democratic state to democratically decide that it will provide a minimum assistance to those of its citizens in need is beyond the pale.

For a democracy to provide its citizens with welfare would be coercion; on the other hand, the provision of a legal and constitutional framework, enforced by a police force and an army and indirectly through the control of most of a nation's wealth that creates Kelley's market society in the first place, this is freedom.

Randy E. Barnett, Austin B. Fletcher Professor Boston University School of Law says this:

"A gifted and remarkably clear writer, David Kelley examines the tripartite intellectual pillars of so-called welfare rights: freedom, compassion, and belonging. Skillfully combining philosophical argument with empirical research, he shows how these three concepts, properly understood, are undermined by any coercive welfare program--from AFDC to Social Security to Medicare. Kelley presents the views of those who advocate welfare rights with sensitivity and fairness, but he also shows how everyone, including those in genuine need, is better off in a world of voluntary giving. A brilliant mix of theory and practice, this is a book you will share with your friends.

Yes, by all means, share.

And it will be interesting to follow developmets in Sth Africa. (And BTW, read the Washington Post Story that caught Cato's attention)