Multilateralism

Martha KearneyI am confused about why Martha Kearney chose to ask the two Davids what sort of underwear they wear.   If a male interviewer had asked a female politician about her knickers, he would be thrown off the radio. And rightly so.

I have two older sisters, and no brothers.  So I obviously learned some of my language from them. When I went to boarding school, at the age of ten, it took several weeks before I realised that referring to my own underwear – Y-fronts, since you ask – as my "knickers" was not likely to make me popular with the other boys.  Or not the ones I wanted to be popular with. 

An interesting editorial in The Business on Sunday with which I largely agree:

The evidence from across the globe is overwhelming: governments that “protect” their industries hurt their economies and their people. .. Countries that really believe in free trade should simply make a unilateral declaration to scrap their tariffs without condition on the goods and services of developing nations …

 But I disagree with their criticism of David Cameron:

David Cameron, soon-to-be 20th leader of the Conservative party, can also be counted out. “The poor are getting poorer,” he claimed on a television debate last week, demonstrating his utter ignorance of the subject. The poor are being lifted out of poverty faster than at any time in world history, thanks largely to free trade. More progress has been made in the last 50 years than in the previous 500 years.

Credit where it is due: David Cameron is the first would-be leader that I can remember to speak about our responsiblity to tackle poverty.  Here he is in the Telegraph:

when the Conservative Party talks about international affairs, it can’t just be Gibraltar and Zimbabwe – we’ve got to show as much passion about Darfur and the millions of people living on less than a dollar a day in sub-Saharan Africa who are getting poorer while we are getting richer.

But are The Business and the Adam Smith Institute right, or is David Cameron right? Have the poor got poorer?  As ever, it depends who you mean, and over what time period. 

Here is GDP per capita, in real terms, over the last 30 years.  As you will see, GDP per capita in sub Saharan Africa is 8 percent lower today than 30 years ago; in OECD countries it is 86 percent higher.  But if you look only at the last decade, then incomes in sub Saharan Africa have begun to recover, as governance has improved, conflict abated and aid increased.  Within the region, some countries have grown faster, and some have continued to stagnate.  But broadly speaking, David Cameron’s claim is right: sub Saharan Africa is poorer now than it was 30 years ago.

Graph of GDP per capita - OECD and sub Saharan Africa

GDP per capita (constant 2000 US$) Indexed to 1974=100
Source: World Bank national accounts, and OECD National Accounts.

But I think the question of whether the poor have got poorer is largely irrelevant. The more profound point, which I would like to have seen The Business, the Adam Smith Institute, this week’s Economist, and David Cameron all make, is this. Globalization makes the world richer, on average.  We should have more of it, not less of it.  The way to acclerate globalization is to distribute the gains of globalisation more fairly.  In the last thirty years, the gains have largely gone to the richer countries.  This is not surprising: the rich and powerful are able to capture more of the benefits than the weak and vulnerable.  But this cannot continue.  Let us ensure that in the next decade of deeper and faster globalisation, the benefits are mainly enjoyed by the poor.

Perhaps because I started my working life in the Treasury, I take a rather puritanical view about the way civil servants should spend the public’s money.

So I am with Tim in being outraged by this report that DTI officials apparently used public money to pay for expensive hotels, BMW hire cars, and cocktails. (I say ‘apparently’ because I know that these press reports rarely turn out to be completely accurate). 

In my view, civil servants should never charge alcohol to expenses, should use the cheapest hotels in which they can efficiently stay and work, and should, where possible, travel by public transport rather than taxi or hire cars.

I have had to travel quite a bit at the taxpayers’ expense, and in my experience, government departments have strict rules. For example, civil servants are not allowed to use Air Miles earned on official journeys for private travel; and we had to stay at pre-determined hotels selected for their value for money.

Sometimes appearances can be deceptive. For example, my department negotiated a sweetheart deal with a particular airline, using bulk buying power to get business class flights at economy rates – which may have given the impression to an outsider that the travellers were lording it at public expense when the deal was in fact rather good for the taxpayer (as well as benefiting the civil servants).  And civil servants often stay in well known business hotel chains at government rates which mean that the room rates they pay are no more expensive than a mid-priced hotel which would be less convenient and provides fewer facilities. 

So I don’t know if the DTI officials are guilty as charged, but if they are, I hope they will be properly reprimanded. The fact that this is in the newspapers confirms that it is the exception rather than the rule for British public servants to behave this way, and I hope it stays that way.

If there is one thing that annoys me as much as public servants spending my money wastefully, it is private firms spending my money wastefully. All those expensive hotels and business class sections on planes were not built for people spending their own money, you know.  They were built for business travellers spending your money. It all comes out of your pocket in the form of higher prices, lower returns on your investments, or lower wages.  And the waste of your money by private sector firms is, in total, much higher than the waste of your money by your government.

Right wing trolls across the nation are reaching for their keyboards with their free hand to remind me that the difference is that you have a choice about which private company you buy from, invest in or work for, but government extracts its money from you by force.   But the difference in choice is not in fact very great.  For a start, you do not have that much choice about private sector firms to buy from or invest in – it is in practice very hard to find one that does not overpay its executives or allow them to waste your money on expensive flights and hotels. Second, you do have a choice about government – if you don’t like the one you have got, you can vote to choose another.  The difference in choice, to the extent there is one, is one of degree.  And much, much more of your money goes on private sector waste than it does on public sector waste.

That is not intended to justify abuses of taxpayers’ money by public servants or anyone else.  But as the only member of the Senior Civil Service with a blog (as far as I know), when Tim expresses scepticism that all civil servants are "Simply selfless devotees of the common good", I feel compelled to say that I am similarly unconvinced that those to whom we hand our money in a free market are any less inclined to waste it.

Finishing a half marathon yesterday in Silicon Valley the only water available was sugared water (misleadingly labelled "Vitamin Water").  No normal water was available for the runners.  That’s a disturbing new development.  You would have expected that runners would tend to have healthier habits than the population as a whole, so why would we want to drink sugar?

It is almost impossible to buy anything here in the US that is not filled with sugar.  The manufacturers lace sugar into foods that you might not expect to contain sugar – such as a tin of tomatoes or beans, breakfast cereal, bread, orange juice, soy milk, salad dressing, pasta sauces, pickles and crackers. 

And the quantities are large.  Kellogs Crunchy Nut cornflakes are about one-third sugar by weight (about the same as a Pop Tart). 

Why do manufacturers do this? Because sugar tastes nice and is addictive.  You will enjoy the food and come back to buy more.

If food manufacturers were adding heroin to our food, we wouldn’t allow it.  The food industry is cynically and deliberately poisoning us.  It is time we forced it to stop.

Avoiding added sugars when buying staple foods requires extreme vigilance.  Foods here are often misleadingly labelled, with the sugar disguised as maltodextrin, sucrose, fructose, glucose,  corn syrup, maltitol, dehydrated sugar cane, fruit sugars or other equivalents.  And by splitting the added sugar into these different components, the manufacturers can push sugars further down the ingredients list than if the sugars were all bundled together. 

The good news is that sugar consumption here in the US is beginning to dip down, after a peak in 1998.  From the mid-70s to the mid-80s, high fructose corn syrup exploded onto the scene, taking about a third of the cane and beet sugar market, adding to overall sugar consumption, and contributing to the obesity epidemic.  But while the total appears to have peaked, as the graph below shows, Americans still consume more than 5 ounces (150g) of sugar per day: the equivalent of about 4 cans of coke. Apart from soda, most of this is sugar added to ordinary food items by the food processing and catering industries.

Here is an article I wrote a while ago explaining the biochemistry of sugar consumption.  Added sugar will be the new tobacco: it is highly dangerous, addictive and poisonous, and is central to chronic health problems afflicting affluent societies today.

sugar_hfcs.gif

joneshead.jpgforbes.gifAs Corporal Jones used to say in Dad’s Army, "they don’t like it up ‘em".

 Who are we talking about now?

Companies.  You know, rich people.  The sort that read Forbes.  Very upset, they are. About bloggers.  Yep, us. We, the people, have the temerity to stand up to corporate power.

Daniel Lyons has a preposterous article in Forbes (free registration) which whines a lot, in that annoying way that you see in movies when the tough guy is suddenly very afraid and pleads for his life. Apparently, bloggers sometimes criticise brands:

Blogs started a few years ago as a simple way for people to keep online diaries. Suddenly they are the ultimate vehicle for brand-bashing, personal attacks, political extremism and smear campaigns. It’s not easy to fight back: Often a bashing victim can’t even figure out who his attacker is. No target is too mighty, or too obscure, for this new and virulent strain of oratory. Microsoft has been hammered by bloggers; so have CBS, CNN and ABC News, two research boutiques that criticized IBM’s Notes software, the maker of Kryptonite bike locks, a Virginia congressman outed as a homosexual and dozens of other victims–even a right-wing blogger who dared defend a blog-mob scapegoat.

You can see his point, can’t you? What’s the point of being disgustingly rich if you can’t control the media, eh?

Lyons goes on:

The combination of massive reach and legal invulnerability makes corporate character assassination easy to carry out. Dry treatises on patent law and trade policy don’t drive traffic (or ad sales) for bloggers and hosts; blood sport does.

Call me cynical, but I haven’t noticed UK PLC or Corporate America sticking to "dry treatises" in their massive advertising campaigns to coax us to buy their products.  Nothing wrong in sexy blood sports when Mr Murdoch or Mr Forbes owns the channel.  Media sharks circling their victims when they smell blood: that’s what the punters want, right?  But what if the lunatics take over the asylum? What indeed.

No wonder companies now live in fear of blogs. "A blogger can go out and make any statement about anybody, and you can’t control it. That’s a difficult thing," says Steven Down, general manager of bike lock maker Kryptonite, owned by Ingersoll-Rand and based in Canton,Mass.

People can make statements and ‘you can’t control it’. You mean – citizens being able to express themselves to other citizens without rich people getting to decide who will be heard?  Blimey.  No more "Permission to speak, sir?".  Pass the port, Henry, we’re really screwed now.

Even mighty Microsoft, for all its billions, dares not defy the blogosphere. In April gay bloggers attacked Microsoft over its failure to support a gay-rights bill in Washington State (the company is based near Seattle). "Dear Microsoft, You messed with the wrong faggots,"wrote John Aravosis, publisher of AmericaBlog, which threatened to oppose Microsoft’s plans for a big campus expansion unless the company caved in. Microsoft reversed itself two weeks later, saying it supports gay-rights legislation after all.

A touching story: I’m missing the part where this is bad.  Perhaps if I were a billionaire businessman I would understand what was wrong with ordinary people putting pressure on Microsoft to act as a good local corporate citizen.

Lyons has some advice for businesses who come under fire from the bloggers: play dirty. Here is what he recommends:

BASH BACK. If you get attacked, dig up dirt on your assailant and feed it to sympathetic bloggers. Discredit him.

ATTACK THE HOST. Find some copyrighted text that a blogger has lifted from your Web site and threaten to sue his Internet service provider under the Digital Millennium Copyright Act. That may prompt the ISP to shut him down. Or threaten to drag the host into a defamation suit against the blogger. The host isn’t liable but may skip the hassle and cut off the blogger’s access anyway. Also:Subpoena the host company, demanding the blogger’s name or Internet address.

SUE THE BLOGGER. If all else fails, you can sue your attacker for defamation, at the risk of getting mocked. You will have to chase him for years to collect damages. Settle for a court order forcing him to take down his material.

That doesn’t sound like good advice to me. That is a recipe for a company doing itself serious harm. In fact, it reminds me of another of Corporal Jones’s famous remarks, invariably uttered as he ran around like a headless chicken: "Don’t panic! Don’t panic!"

I suppose I knew that the rich and powerful would fear the day when ordinary people are able to speak the truth and have access to information that is not mediated by the control of, er, the rich and powerful.  But I didn’t expect them to be quite so open about the danger this presents to them.

They don’t like it up ‘em.

More at Micro Persuasion, James Robertson, Below the Fold, Dan Gilmoor, AccMan Pro, Doc Searls.

Those of a right-wing disposition may care to look away now.  

Robert Reich’s 2004 book, Reason, argues that liberals* have twice saved capitalism from its own excesses:

The first time was in the early 1900s. By then, captains of American industry had monopolized the economy into giant trusts, American politics had sunk into a swamp of patronage and corruption, and many factory jobs were unsafe – entailing long hours of work at meager pay, often exploiting children.  In response, liberals championed anti-trust laws, civil service reforms, and labor protections.

The second save occurred in the 1930s, after the stock market collapsed and a large portion of the American workforce was unemployed. Then liberals regulated banks and insured deposits, cleaned up the stock market, and provided social insurance to the destitute.

Both times, liberal reformers were accused of interfering in the free market. But in both instances, liberal reformers prevailed.  They did so by appealing to public morality and common sense.

It is time, once again, for liberals to restore confidence in our system and save capitalism from itself.

This seems interesting in two ways.  First, Reich is right that progressive politics has rescued capitalism from a tendency to self-destruct.  In this way, progressives have enabled capitalism to continue to serve its purpose as a driver of innovation and prosperity in society.  Pure laissez faire policies would have failed, resulting in a collapse of the capitalist project.  Second, this is a powerful narrative for the progressive left to adopt.  Progressive politics should define itself not in opposition to capitalism but as its guardian.

Is Reich right that it is time, once again, for liberals to step in to restore confidence in capitalism?  I think he probably is: we are seeing structural challenges which capitalism does not seem to be able to solve on its own terms.

The origins of capitalism’s next crisis? 

To my mind, the heart of the problem of capitalism today is its interaction with politics in modern democracies.  Many of us want to live in a world in which citizens elect and control governments;  and governments, in turn, regulate business to create well-functioning markets. But over the past quarter of a century we have an increasing sensation that this has been reversed. To an increasing extent, businesses fund the political process and much of the media, and so control government; and government increasingly controls the citizen.

That reversal of the normal flow, in which businesses rather than citizen determine government decision-making, is increasingly shifting our societies away from the outcomes which we expect from well-functioning markets.  The consequences include: 

  • The large and widening gap between rich and poor within developed countries.
    Top earners now earn 300 times as much as the bottom earners, compared with 20 times as much only twenty years ago. There is no economic rationale for the salaries earned by the super rich – far above their economic value on any reasonable measure – but the forces of corporate governance have been captured and seem powerless to bring the irrational exuberance of excecutive pay into line with the fundamentals.
  • The large and widening gap between rich countries and poor countries.
    The inequality between rich and poor is at historically unprecedented levels, and poor countries (such as many in Africa) appear to be trapped in a future of low growth.  The traditional mechanisms of catch-up – such as trade, technology and knowlege transfer and migration – are being deliberately choked off by the rich countries, apparently determined to pull up the ladder behind them.
  • A failure to grapple with the world’s most important long term challenges
    A drive to short term economic performance is leading us to ignore critical long-term challenges. We are unable to create incentives for our markets to tackle the growing environmental crisis. We face an obesity time bomb, driven by the cynical and deliberate efforts of the processed food industry to sell us food that is addictive but unhealthy.  We face an alarming growth of drug-resistant diseases,  caused by mismanagement of existing pharmaceuticals, and an unwillingness to invest enough in future medicines.
  • Erosion of confidence in financial services: heads-I-win-tails-you-lose
    The financial services industry is failing in its task of ensuring an efficient allocation of capital. Financial services companies earn large salaries investing our savings on our behalf, which is an economically valuable activity if they do it well.  I don’t expect traders and investors to anticipate expected profits in 15 years time within a margin of 50 percent either way.  But I do expect them to be able to distinguish a viable business with real customers, revenues and profits from a company with no economic foundations such as Enron or Worldcom.  Furthermore, we have reneged on society’s contract – implicit or explicit – to provide a decent life after a lifetime of work. The companies that took "pensions holidays" when the stock market was rising – unilaterally choosing not to make contributions for their employees’ pensions – now walk away from their obligations when pension funds underperform. 

These are not short term, temporary problems, like the US current account deficit. These are deep, structural challenges that require enlightened, intelligent intervention to restore the conditions in which free markets are able to deliver the kind of society we want. 

To achieve this, we have to address the relationship between corporations and government.  That may require relatively modest, and quite inexpensive changes such as campaign finance reform and an adjustment of the legal status of companies. It is not a plea for wholesale regulation and government interventionism: but rather to create a different sort of relationship between government and business, so that it government more responsive to the collective, long-term welfare of society, and less to the short term commercial pressures of powerful firms.

Fly-by-wire capitalism

The F117A Nighthawk fighter aircraft is aerodynamically unstable. It stays aloft because a computer constantly adjusts the flaps of the plane to keep it from falling out of the sky.  The plane is faster as a result of this design, but it needs constant trimming and adjustment to make it work.

Capitalism seems to be the same. The very forces that make it so effective at generating innovation, growth and incentives also make it unstable.  The rewards that drive innovation also reward rent-seeking and creation of monopolies.  The accumulation of wealth that motivates the most inventive people in our economy results in an accumulation of power that we do not find acceptable.   Capitalism is a great way to deliver the benefits of a dynamic, fast-moving economy; but like the F117A, it needs an occasional intervention to prevent it falling into a tailspin.

Retaking the agenda 

Conservatives and neo-conservatives have succeeded in framing liberals as idealogues, driven by their political agenda to undermine the efficient functioning of proven mechanisms to deliver growth, jobs and prosperity.  

Liberals should resist this. It is Conservatives who claim that unr
egulated markets are not only efficient but also the only morally justified way to organise society: and hence their ideology that hinders understanding of how markets can be effective at delivering the kind of society we want to build. Liberals, by contrast, are pragmatists who see competitive markets as an essential and efficient way to deliver prosperity and opportunity for everyone; and who recognise that there is a role for Government to create the conditions in which they will do so consistent with our vision of how we want to live.

Conclusion

Perhaps I am too pessimistic about the ability of democratic, liberal societies to adjust course.  But Reich’s examples are compelling: in both cases, intervention was needed to put the evolution of capitalism back on course.  

We are facing failures of capitalism that are potentially cataclysmic: whole generations of the developing world condemned to unacceptable poverty, financial systems which lack credibility, and ticking time-bombs, visible to us all, that we are unwilling to defuse.  Is it time for liberals, once again, to save capitalism from itself?

(* Note that the word "liberal" is being used here in the American way, not with the European meaning).

Tim Worstall reacts to an article by Bill Easterly which I quoted here last week.  Bill Easterly argues that we do not have evidence to support the view that countries are caught in a poverty trap, or that countries can be helped to "take off" in a virtuous circle of growth and rising prosperity.

Tim says:

timworstall.jpg

But when a respected academic in the field (as Bill Easterly is) says that the basic structure of the problem has been misidentified, and that thus our solution is completely wrong, don’t you think we might want to sit down and have a little discussion? Instead of throwing money at it in a way that we know is incorrrect? 

Of course, that isn’t what Bill Easterly says at all. He would be horrified at being misrepresented in this way. 

This is not a debate about whether aid works (which we know it does, on average).  Nor is it a debate about the many good things that can be done with aid to help countries to grow and reduce poverty.  Bill Easterly would agree with Jeff Sachs and just about every other development expert that these are good things to do, and we should do more of them.

At the heart of the debate is a different question.  Bill Easterly (and many of his colleagues at CGD, including me) think that Jeff Sachs overstates the effect that more money, by itself, will make to developing countries.  We think that there are many things that poor countries can and should do to help themselves, most of which go under the general banner of improved governance.  We think that there are many things that rich countries can and should do, over and above giving aid, to help poor countries, including opening our markets, reducing conflict, tackling corruption, intelligent migration policies, tackling climate change, and reducing the arms trade. Aid is an important part of the story, which definitely helps, but it is only part of the story.  Bill Easterly’s point is that it is simplistic to think that we can throw money at the problem and think that this alone will solve it.

In a debate between experts like Bill Easterly and Jeff Sachs, the common ground is often taken for granted, and the discussion focuses areas of difference. To an outsider it may look as if views are heavily polarised.  In reality, there is a great deal of agreement: neither Bill Easterly nor Jeff Sachs would say that aid alone is enough; and neither would say that aid is not effective in reducing poverty. They would both agree that the rich countries have a moral duty (as well as it being in their self interest) to give more aid, and to give that aid better.  They would agree that there are many other things that the goverments of poor countries and rich countries should do to accelerate the reduction of poverty.

Nothing like Tim’s conclusion follows.  Nobody thinks that "the basic structure of the problem has been misidentified".  Nobody thinks "our solution is completely wrong". There is a remarkable amount of consensus about the causes of the problem of poverty. There is very widespread agreement, supported by evidence, that aid is effective in promoting sustained economic growth, as well as directly alleviating the effects of poverty in the short term.  Far from "throwing money at it in a way that we know is incorrrect", we have clear evidence that aid expenditure is one of the most productive investments of funds that we know of, yielding higher returns than other public or private investments.

So, Tim asks, "don’t you think we might want to sit down and have a little discussion"?  There are endless discussions on all this, including one at the United Nations next week.  The last thing we need is more discussion. The international community made a historic commitment at the beginning of this Millennium to a set of goals of profound importance, including to halve the proportion of people living in poverty by 2015.  We know that we are not on track to meet those goals.  Furthermore, we know what we could do to meet them.  It would not be particularly expensive for the rich countries – indeed some of the measures, such as opening our markets, would make us better off.   The summit next week is an opportunity for the rich nations to recognise that we are not doing enough to live up to the goals that we have set ourselves. We should agree now to do the simple and inexpensive things, which we know work, to put the misery of world poverty behind us.

I am not sure yet if President Bush is seriously planning to conduct his own enquiry into Katrina, or if this was just a poor choice of words. 

If he does end up holding an enquiry into the events, I predict this will be his undoing.  It is always the cover-up that creates the political scandal.  Some evidence will come to light during this enquiry which will be uncomfortable for the administration, and it will not be properly reported.  And that will, in time, be the scandal that finishes him.

We are witnessing appalling scenes from New Orleans, reminiscent of the dystopic vision of Mad Max blended with Waterworld.  Heart wrenching scenes of people desperate for food, water, health care and transport. A breakdown in law and order. Police officers  bravely defending the their stations under sustained attack.  Gangs of youths roaming the city, looting and raping. Troops sent in with shoot-to-kill orders.  Shanty towns developing in sporting facilites.  Maybe some of this is sensationalism by the mainstream media; let us hope that this is not the reality faced by most people.

I have two immediate reactions.

First, just how close we all are, all the time, to a collapse in civilisation, and a Hobbesian state. On the surface, the institutions of society seem strong, natural and permanent. But this is a facade. Take away that superstructure, even if only for a few days, and apparently our humanity deserts us.  We saw during the Rwanda genocide how crowds can be whipped into hysteria, and persuaded to commit atrocities that seem to us unthinkable. Within days of hardship in America, the richest society on earth, founded on noble principles, society appears if not to have fallen apart then to be fraying at the edges. Society must never be taken for granted, and we must never be complacent about what we need to do to nurture and sustain it.

Second, I wonder if this would have happened quite like this in Europe.  Leave aside whether the rescue services would have done a better job.  Has Europe developed stronger instincts of cooperation and mutual support? Has America developed a more individualistic, survival of the fittest society?  Has the social and economic exclusion of poor blacks, who have been worst affected by the flooding of New Orleans, created a group of people who do not feel they owe anything to their community?  In Europe, would the relative social cohesiveness have done more to keep social structures and community cooperation together? Let us hope we never find out. How much difference does it make having guns?

A tragedy has befallen New Orleans. May hope and society be soon restored.

You will recall that there was a flutter in blogland a couple of weeks back about the causes of the famine in Niger, triggered by an article in the Washington Post which claimed that “the rise of a market mentality” had contributed to the famine in Niger. A number of us, including Cafe Hayek, TechCentralStation, Newmark’s Door, The Globalisation Institute, Tim Worstall and me, reacted with a discussion about the circumstances in which there might be a famine but no general shortage of food, and pointing out that the solution may lie not in providing food but money to the very poor.

So it was interesting to see this article on BBC News Online, which is based mainly on an interview with Bill Easterly, making essentially the point that a number of us were making:

"It is axiomatic that flooding the market with food drives down the price for local farmers," Mr Easterly says. …

Mr Easterly and others are not arguing that the solution to perverse incentives lies in withholding emergency aid.

They contend that it could be made to work better in a number of ways, including:

  • Providing compensation to local farmers
  • Making sure aid stops when things improve
  • Giving cash rather than food

But the most effective move would be to focus less on emergencies and more on chronic problems. Mr Easterly says this could be done cheaply in the Sahel.

Quite so.

I was playing Transformer by Lou Reed the other day.  Grethe walked in, and demanded to know, in that forthright Scandinavian way, why I was listening to this man who cannot sing.  After a moment’s thought, I replied that there are many great songs by bands or artists who can’t, you know, sing. At least, not very well. 

Thinking about it some more, this seems to be particularly true of some of the greatest musicians of the 1960s and 1970s. Here is my top five list of great singers who can’t actually sing:

  1. Bob Dylan
  2. Lou Reed
  3. Paul Simon
  4. Van Morrison
  5. Mark Knopfler

Other nominations gratefully received.

No good ever comes of trying to change someone’s mind about abortion.  So I should know better than to react to Andrew’s argument against abortion at The Sharpener, which has already generated a lot of discussion over there (noticeably, among a bunch of mainly men rather than women). But my first degree was in Philosophy, so I can’t resist an argument about ethics. Especially when I think the discussion would be helped by a little more clarity and precision.

As is often the case with people who are against abortion, Andrew gently glides between two different arguments for attributing rights to a foetus:

  • One argument is that the foetus already has characteristics that give it moral status.
  • A separate argument is that the foetus has potential to become something that has moral status

If you believe that the foetus has a moral status, then there is the further question of how to balance the interests of the foetus with the interests of the mother.  But if you don’t believe that the foetus has a moral status then this issue does not arise.

So let’s look at the two arguments for giving moral status to a foetus.  (Like Andrew, I am not going to address those who are against abortion for religious reasons. If you have an invisible friend who has told you that a foetus has rights, then none of what follows is going to convince you.)

What characteristics does the foetus have that would give it moral status because of what it is?  An analogy with our treatment of other species is instructive: it seems that we generally grant moral status in proportion to an animal’s consciousness.  Most humans do not eat higher primates, because monkeys seem to be not only conscious, but self-aware and capable of entering into quite complex relationships.  We routinely kill and eat animals that feel pain, however, such as cows and pigs, though we generally frown upon deliberately causing pain. And nearly everyone thinks there is no moral harm in stepping on an ant, because it is regarded as having a very low level of consciousness and little ability to feel pain.   So we seem to think that there is some positive correlation between moral status and consciousness or self-awareness. But if that is our basis for granting moral status, the foetus would not come very far up the scale. It seems that a foetus does not feel any pain until at least 26 weeks at the earliest  (a recent paper in the Journal of the American Medical Association says that  that brain nerve connections are unlikely to develop enough by 29 weeks to feel pain).  Even when it does begin to feel pain, on this yardstick for judging moral worth it is only reaching the equivalent status of perhaps a fish or a bird – and a foetus at an advanced stage of development would not have the level of self-awareness of a cow or a dog. 

So perhaps there is something else about what a foetus is that might be the basis of a moral status, even though it has a low level of consciousness and limited ability to feel pain?  Some people take the view that it has status because it consists of human DNA.  But so do sperm, and we don’t generally think that sperm has moral status, so it can’t be that.

We are tempted at this point to say that a foetus is more important than a cow or a sperm because of what it may become – namely a human being.  But that is an argument based on the future potential of a foetus, not because of what it already is; and we will come to that separately.  It seems very hard to say that a foetus should have significant moral status because of what it already is.

So what about the second argument, that a foetus has moral status because of what it will become? For Andrew, this seems to be the clincher:

The potential for life, which I identified earlier, is paramount. … To deny the potential for life is, at least in my own opinion, morally equivalent to murder. 

But what does this really mean? Taken literally, this is an argument not only against abortion but also against contraception and against chastity or sexual abstinence.   If we say that every potential future life has the value of a living person, then we are bound to say that no egg should go unfertilized, and no opportunity for conception should go unconsummated.  Are families who choose to limit the number of children they have – even if by abstinence – guilty of pre-meditated acts of murder against potential future human beings?  We clearly have no general obligation to ensure that all potential future human beings come into existence, and so there is no general moral status for "a potential human being".

It does not appear that, considered separately, there is a convincing case for granting moral status to a foetus on the grounds of what it is; nor is there a case for granting moral status to all potential future human beings. Is there, perhaps, some hybrid case, based on a mixture of the two?   Those who oppose abortion often seem to be saying that something that occurs at conception as a result of which we should begin to pay attention to the potential future human life that it embodies.  But what is it about the fusing of two zygotes that gives the combination of them a morally valuable possible future that they did not have when they were separate?  It is true that conception marks a moment when the range of possible future outcomes narrows, as conception settles the issues of which genes will be combined. But there remains a very wide range of possible outcomes.  And why does "potential future human life" only have moral status once there is a more narrow range of possible outcomes about what that person would be like?

It is interesting to read Andrew’s original post in the light of this.  The first of his three arguments (which he calls "the science") slides back and forth between the argument about potential and the argument about what the foetus already is.   My view is that when you prise these two thoughts apart and examine them separately, neither stands up to examination; and there is no satisfactory explanation of how the two approaches might interact to make a combination of the two more persuasive than either argument on its own.

Because I do not think that a foetus has significant moral worth, I do not think that there is anything to weigh up against the rights of the woman.  So on my view of the status of the foetus, Andrew’s second point falls away entirely.  However, if you did not agree with the reasoning above, and you were still persuaded that a foetus has the same moral status as a fully grown, conscious human being, it would still not follow that there should be restrictions on abortion.  There is no general duty to sacrifice your own rights to control your body to save the life of another person.  For example, I do not believe that people should be compelled against their will to give away a kidney or undergo a bone marrow transplant to save the life of another person.  (It might be nice if they chose to do so; but most of us would not want to make it illegal to refuse.)  For similar reasons I do not believe that a woman should be forced to incubate another human being if she chooses not to; even if that means the death of the other person. (I realise that this argument also depends on the fact that I don’t think there is a moral distinction between action and inaction – but that is a topic for another day.)  So even if I believed that a foetus had moral status – which I don’t – I would still favour allowing women to choose whe
ther or not to end the pregnancy.

This is a topic on which there is scope for a range of possible opinions.  Andrew does not want to hear arguments of the form "if you take that argument to the extreme, you’d be condoning x".   But I do think it is important to try to articulate the principles that seem to guide our judgements, and then to ask whether those principles make sense, including by considering whether we would want them applied more generally.  If the principles on which we believe we are basing our judgements also lead us to conclusions that we find unacceptable, then that is surely a good reason to question the principles themselves.

The argument against abortion is, in my view, a good argument of how intelligent and well-meaning people can reach the wrong conclusions on the basis of imprecise reasoning.  The argument against abortion seems to depend on a combination of two separate arguments which sound superficially attractive when intertwined, but which does not seem convincing when the pieces of the argument are disassembled and examined in turn.

I commend to you this very funny article in the satirical magazine, The Onion: 

KANSAS CITY, KS—As the debate over the teaching of evolution in public schools continues, a new controversy over the science curriculum arose Monday in this embattled Midwestern state. Scientists from the Evangelical Center For Faith-Based Reasoning are now asserting that the long-held "theory of gravity" is flawed, and they have responded to it with a new theory of Intelligent Falling.

"Things fall not because they are acted upon by some gravitational force, but because a higher intelligence, ‘God’ if you will, is pushing them down," said Gabriel Burdett, who holds degrees in education, applied Scripture, and physics from Oral Roberts University.

Burdett added: "Gravity—which is taught to our children as a law—is founded on great gaps in understanding. The laws predict the mutual force between all bodies of mass, but they cannot explain that force. Isaac Newton himself said, ‘I suspect that my theories may all depend upon a force for which philosophers have searched all of nature in vain.’ Of course, he is alluding to a higher power."

Hat tip: Brad De Long

You may be interested in the transcript of an online discussion with Washington Post journalist Craig Timberg. You will recall that it was his article that set off a debate in the blogosphere about the role of markets in the famine.  He comes across as a very sincere and decent journalist, doing his best to bring this crisis to the world’s attention.

Thanks to the Private Sector Development blog at the World Bank for publicising this discussion. 

According to SFGate.com, the city of San Francisco is putting out to tender a proposal for city-wide WiFi.

An article in Thursday’s Washington Post by Craig Timberg claimed that “the rise of a market mentality” has contributed to the famine in Niger.  As you would expect, this has provoked a strong reaction from free market bloggers, such as Don Boudreaux at Cafe Hayek, Melana Zyla Vickers at TechCentralStation, Craig Newmark at Newmark’s Door, and Anthony Batty at The Globalisation Institute, who claim that the problem has been caused by price controls, excessive government regulation and the unintended consequence of well-meaning donor intervention.

In this polarised debate, both ideological extremes are wrong. This is a reality-based blog, so here is the middle ground.

First, Timberg’s claim that market liberalization has led to this famine is painfully misguided. He says:

“In a country adopting free market policies, the suffering caused by a poor harvest has been dramatically compounded by a surge in food prices and, many people here suspect, profiteering by a burgeoning community of traders, who in recent years have been freed from government price controls and other mechanisms that once balanced market forces.”

This does not make sense. Surely he cannot believe that food production would be higher, and more food would be available in Niger, if food prices were lower, for example as a result of Government price controls.  Rising food prices create incentives for higher production, marketing of stockpiled food, reduced exports and increased imports.   If Niger has too little food, then an increase in food prices is exactly what is needed to increase the supply.

 

Timberg offered himself up as a free hit for the right wing commentators, which they duly took.  But seeing the world through ideological blinkers, they headed off over the reality horizon in the opposite direction.

Notably, Melana Zyla Vickers misunderstands Amartya Sen’s Poverty and Famines, claiming that Sen finds that “command-controlled, totalitarian and authoritarian regimes have regularly bred famine”.  Actually, this wasn’t Sen’s point.  His analysis showed that some (but not all) famines are caused not by a lack of food production, but by a failure of entitlement, which occurs when some members of the population lack the resources to buy the food they need.  It is true that Sen pointed out that excessive state interference might contribute to the failure of the market to ensure that food reaches people who need it. But his central conclusion, which Ms Vickers conveniently ignores, was that even in free markets with sufficient food production, it is possible that an imbalance in the distribution of economic resources might lead to hunger and famine.  Sen pointed out that in these circumstances, the best approach might be for aid donors to make cash grants to those who need food, to enable them to buy it in markets and so feed themselves while increasing incentives for the production and distribution of food. So on Sen’s analysis, the conclusion is that rich countries should provide increased resources for Niger, provided in the form of unhypothecated cash grants to the poor (basically, dropping dollar bills out of a helicopter).  But of course Ms Vickers (and the corporate interests that fund TechCentralStation) are ideologically opposed to government assistance, and would prefer any US aid that does sneak under the radar to be tied to US corporate interests such as agribusiness, so this wasn’t the conclusion that Ms Vickers reached. She prefers instead to blame the

“failure of the socialist-style economic players — within Niger and around it — to allow its people feed themselves.” 

So to be clear: Timberg is wrong that a move to less regulated markets has reduced food production; but Ms Vickers is wrong that food shortages are the result of excessive government regulation and intervention. (Incidentally, Ms Vickers also makes the bizarre claim that most of the population in sub-Saharan African “lives under command-controlled economic conditions” – which is complete balderdash.) 

Café Hayek also has a crack at the donors:

“Perhaps if the U.N. weren’t in Niger, traders would be selling food directly to starving people rather than waiting for well-meaning westerners to buy it.”

It would be right to criticize the UN and other donors to the extent that they are importing surplus food from western countries and dumping it in Africa, so driving Africa’s own food producers out of business.  We don’t have the figures yet, but I have no doubt that some of this is going on, and it is a scandal.  But using aid funds to buy food locally, which is what Café Hayek criticises, is exactly what the donor should be doing, as it supports local food producers and increases production.  Café Hayek’s idea that increasing the demand for locally-produced food is likely to result in a restriction on the production and supply for food in Niger is just as absurd as Timberg’s converse ideological argument that lack of food production is caused by higher prices. (I am not saying that it is logically impossible; just that it is highly unlikely and an allegation made with no evidence whatsoever.)

Craig Newmark (the economist, not the geek who runs Craig’s List) is closer to the truth.  He is right to dismss Timberg’s claim.  But he too ignores the point that even in free, otherwise well-functioning markets, famines can occur when some people are too poor to buy the food they need.

Overall, this was dismal reporting by Timberg which should never have got through quality control at the Washington Post (why didn’t someone like Sebastian Mallaby spike this before it reached the paper?).  But the ideologically-driven outpourings of the right wing bloggers were no closer to reality.  The problem here is not market regulation or aid, but poverty, and that is something that we can and should do something about.

Another paper has been published showing that fructose (a sugar that naturally occurs in fruit), when used as an artificial sweetener, may be even worse than other sweeteners in inducing a hormal response that encourages obesity.

As I explained in this paper, fructose gets a better press than it deserves, because it has a low glycemic index (GI).  The reason is not that fructose is a complex carbohydrate which is metabolized slowly, but because the glycemic index measures the impact of food on glucose levels in the blood, and it happens that the human body does not break down fructose into glucose, so fructose sneaks under the radar. 

As a result of having a low GI, fructose is sometimes treated as if it is a healthier sweetener than sucrose or other processed sugars, when in fact the evidence suggests the exact opposite. (Many current diet fads, such as the South Beach diet, involve eating foods with a low GI).

Consumption of fructose has increased by 20-30% over the past thirty years, a rate of increase similar to that of obesity.  A sweetener called high-fructose corn syrup (HFCS) is used extensively as an additive by the food industry, for example in soft drinks, baked goods such as cakes and muffins, sauces, prepared desserts, and other processed foods such as syrups added to coffees. While the average consumption per person of refined cane and beet sugars has decreased by 35% over the thirty years to 2000, the consumption of corn sweeteners has increased by 277%. High-fructose corn syrup consumption has increased 40-fold from less than 0.5 grams daily per person in 1970 to 53.9 grams daily per person in 2003.

I am increasingly confident that processing of foods, especially the addition of sweeteners such as HFCS, will be "the new tobacco" in years to come, as we come to realise that we have been deliberately and cynically poisoned by the processed food industry.

Quentin Stafford-Fraser debunks the idea that businesses (or the IT shops of a business) should be focused on what customers say they want.

How many of those people now carrying iPods could have told you a few years ago that that was what they really wanted? … in the words of Wayne Gretzky, you want to skate to where the puck is going to be, rather than where it is now. And to do that, you can’t usually rely on the customers. Nor can you relay on the business guys, or the sales guys, or the marketing guys. They’ll learn what the customer wants at about the same time as the customer does. No, to be ready for the future, at least to some degree, you need to be a technology-focused company.

Hat tip: John.

There are people who think that there should not be a significant expansion of aid to developing countries; of these, some believe that all aid harms the recipient, while others believe that aid is generally effective, but that there are diminishing marginal returns which mean that expanding aid significantly beyond current levels would not be effective. 

One concern about increasing aid is that there might be adverse macroeconomic effects from large aid inflows, broadly comparable to the Dutch Disease effects associated with export earnings from natural resources.  These resource inflows lead to an appreciation of the exchange rate, which can make domestic industries internationally uncompetitive.  Recently, some literature has focused on the negative impact that large external resource flows might have on governance and accountability. If there are small benefits from additional aid, then it is possible that these negative effects might outweigh the benefit of marginal extra aid dollars.

In a very interesting new paper, Is Aid Oil?, Paul Collier compares the impact on African countries of aid inflows with the impact of revenues from natural resources.  Collier finds that the way in which aid is given makes it vastly better than resource rents as a source of finance.

Aid evidently has very different effects from resource rents. Indeed, when aid is introduced alongside resource rents in the Collier-Hoeffler growth regressions described above, the hypothesis that they have the same effect can be decisively rejected. This suggests that the superior average results of aid are not simply due to better allocation among countries: within a given county aid and resource rents have distinctive effects. In turn, this tells us that the in-country modalities of aid have made an important difference. 

Aid agencies are adding value to the transfers that they administer, and indeed doing so to a very considerable degree. The evidence of oil implies that aid agencies face an intrinsic problem: the baseline effect of resource transfers is negative and the agencies have to offset this by purposive allocation and complementary inputs. Nevertheless, such an activity need not be forlorn: an analogy with the effects of hospitals might help to clarify the point. The baseline for hospital activity is also significantly negative. By bringing patients with a variety of illnesses together in a single building, a hospital transmits disease. Even in well-run hospitals, many people contract illnesses from others while there, and spread these illnesses when they leave. Nevertheless, societies rightly see hospitals as vital: the value-added of a well-run hospital far offsets this negative baseline effect. This seems to be the story with aid agencies. The radical critics of aid are correct in the sense that the effects they point to are adverse and important, as demonstrated by oil. But their overall assessment is as wrong as would be a proposal to close hospitals. Indeed, their critique would be far more usefully directed to reforming the governance of oil revenues: the task of making oil work more like aid is far more promising than thetask of making aid work better.

Full disclosure: the author is an official of the UK Department for International Development, currently on unpaid leave to work at the Center for Global Development.

I expressed some doubt here about President Bush’s claim that US aid to Africa had trebled.

My colleagues at the Center for Global Development, Steve Radelet and Bilal Siddiqi, have now done the numbers.  They find that total U.S. aid to Africa has doubled, but not tripled, since 2000, continuing an upward trend that began in 1996.

The pledge to double aid implies an additional $4.3 billion in aid to Africa by 2010. This is accounted for by existing projected increases in the Millennium Challenge Account ($2.0-$2.5 billion), the global AIDS program (PEPFAR) ($1.5 billion), and the recently announced malaria program ($0.5 billion). The pledge to double aid that was made at Gleneagles should therefore be seen as confirmation of existing pledges, rather than an announcement of something new.

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