The World Bank’s Doing Business survey is a comprehensive annual analysis of which countries are the best and worst places to business. This year’s results have just been published, and they make fascinating reading and provide valuable information about the business climate in different countries.
This survey tells us quite a bit about the relationship between the investment climate and poverty. As Tim Harford puts in the PSD blog:
As we’ve discovered in previous years, it seems that the poorest countries are also the ones with the most intrusive regulations.
Nine of the worst ten countries for doing business are in Africa, as are 17 of the worst 20. The graph below of the Doing Business rank against income per person illustrates that there is a very strong relationship between improving the climate for business and rising prosperity.
(I have used a log scale for income, which means this graph visually understates the growth of income as the Doing Business rank increases.)
To get a sense of the importance of this relationship, look at the trend line: simplistically, it shows that an increase in the Doing Business ranking of one place is correlated with a more than 20 percent increase in income per person.
A word of caution about this relationship. First, it probably goes both ways. As a country gets richer, it can afford to make improvements which improve the climate for doing business (lower tax rates, more efficient bureaucracy etc). So some of the correlation flows from higher prosperity to better business environment. Second, it is likely that improvements in the business environment and rising prosperity share some common causes – the most obvious candidate being the existence of accountable and effective government. So this very strong correlation does not, by itself, prove that improving the climate for doing business would necessarily increase prosperity.
But as consultants like to say, though the size of the relationship is uncertain, the result is “directionally correct”. The correlation is sufficiently clear to conclude what we all instinctively know: part of the reason for prosperity in richer countries is that they have created a good environment for businesses, which create jobs and rising prosperity. Furthermore, the size of the correlation is big enough to suggest that the benefits of creating a better climate for business could be very significant.
This is one of those situations where economics, common sense and the data all point in the same direction. I hope that governments in poor countries and aid agencies will use the Doing Business report to identify the steps they can take to improve the environment for business, including using the report to learn from the ways in which other countries address the same challenges. Many of the steps that governments could take to remove senseless red tape and improve economic institutions are not particularly expensive (though that doesn’t mean that they are always easy). This is an agenda that they cannot afford to ignore.
So New Labour plans to introduce a new offence of publishing a statement which "glorifies, exalts or celebrates" acts of terrorism. (Full text here – pdf).
Alfred Nzo, General Secretary of the African National Congress, spoke in Camden on June 26th 1980, the 25th Anniversay of the Freedom Charter. He spoke of the two attacks by ANC on 1 June on two Sasol oil refineries:
The main strategic objective of the ANC and its allies is the armed seizure of political power for the establishment of a people’s government in South Africa. The recent attacks by the ANC guerillas on two of South Africa’s huge Sasol oil-from-coal plants (Sasol l and 2) as well as on the oil refinery have underlined not only South Africa’s continuing vulnerability to an oil embargo but even more significantly, for the future development of the revolutionary armed struggle of our people. The SASOL operation demonstrated the growing skill and sophistication of the actions of our people’s army – the staunchness of its cadres.
If Labour’s proposed legislation had been in place then, he would not have been able to make that speech.
Just sayin’.
I just love this idea. Religious fundamentalists are picketing a planned parenthood health centre in Southern Pennsylvania. Staff and patients are being harassed.
So the centre has set up a pledge bank by which people who support the centre and want to stand in solidarity with them can pledge an amount which increases for each picket that shows up:
If you pledge 30 cents per protester, and PPSP has 100 protesters in October and 160 protesters in November, your donation would be 78 dollars for the entire two-month campaign.
The centre will have a sign outside which tracks the number of pledges, so that the protesters know that the more pickets they send, the more the financial support for the centre will grow.
(Hat tip: Warren Ellis)
Read Chris Dillow at Stumbling and Mumbling who explains why the fuel protests are misplaced.
World leaders will be asked to approve the Outcome Document agreed at the United Nations General Assembly today.
Others will comment on important issues such as the fudge on the Human Rights Council, the survival of the proposed Peacebuilding Commission, the absence of any agreement on disarmament and proliferation, the pretty good text on "responsibility to protect", and an incomplete set of proposals to improve the management of the UN. (For a round-up, see Democracy Arsenal).
The text on development is not much discussed elsewhere, as far as I can see, so let’s focus on that here. First the good news:
- there are several mentions of the Millennium Development Goals, which are only slightly grudging ("objectives … agreed at the Millennium Summit that are described as the Millennium Development Goals")
- previous agreements are endorsed, especially Monterrey and the 0.7% target (somewhat surprisingly)
- the previous proposals to put the United Nations in the driving seat of coordinating development have been toned down ("the UN funds … support the efforts of developing countries through the common country assessment")
And now the bad news. This meeting was conceived as an opportunity to take stock of progress towards the goals ageed by world leaders in The Millennium Declaration in 2000. It is now clear that we are not on track to meet the goals. There is nothing in this draft agreement which recognises the seriousness of the challenge that the world faces. Unless we make significant changes in policies in rich countries and poor countries, we have no chance of getting back on track.
The Millennium Declaration said:
We will spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty, to which more than a billion of them are currently subjected. We are committed to making the right to development a reality for everyone and to freeing the entire human race from want.
Spare no efforts? Today’s world leaders face a simple choice. Nobody seriously contests the analysis that, unless something changes, we are going to fail to meet the Millennium Development Goals. The current text is business as usual. Unless our leaders agree at this summit that business as usual is not enough, we are going to fail on their watch. They cannot say they did not know. They knew and they did not act.
Update 14 September: PSD Blog links to a debate about whether the MDGs matter.
I see from my website logs that somebody in Edinburgh typed this into Google:
can a man feel less of a man after having a vasectomy?
For some reason my name comes up second in Google’s rankings in response to that question! (No snarky comments please.)
The answer is no. You should feel less of a man if you are too afraid to have a simple, safe operation and instead you make your girlfriend or wife take the substantially increased risk of cancer that accompanies the contraceptive pill. If you don’t want children, a vasectomy is about the safest and most reliable form of contraception. And it won’t make you any less of a man.
If you want to read more about my personal experience having a vasectomy, click here.
I do not understand why extraordinary rendition is not causing more outrage in the UK. Read this to find out what it is like to be tortured, and British complicity.
Credit, though, to BlairWatch, who highlights a recent article in the Guardian.
And to my father, Brian Barder, who resigned from the Special Immigration Appeals Commission in protest at the Government’s attempts to use the immigration system to imprison people without a fair trial (which the High Court subsequently found to be illegal) and whose blog is an essential resource for anyone interested in civil liberties.
And to Tony Hatfield, who continues to plug away on this.
And to Stephen Grey, a remarkable journalist who has probably done more than any other British journalist to hold the Government to account (see his website, online news article here, radio transcript here, newspaper article here).
And we should acknowledge Kenneth Clarke for raising the issue in his recent speech on foreign affairs.
Apologies to anyone I’ve missed (let me know in the comments section if there are other great blogs about this.)
The British Government should not condone, tolerate, participate in or benefit from torture. Full stop.
I think the next tech bubble may be on its way.
I was sitting in Oakland airport on Sunday, reading the New York Times and drinking my double espresso. I happened to be wearing a Linux T-shirt.
Which was enough to get me offered a job. The owner of a Silicon Valley tech company, sitting at the next table, came over and said his firm needed a second Linux guy: was I interested?
Apparently they didn’t need a development economist. Which is a shame, as I’d love to become a Silicon Valley billionaire.
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).
Kudos to Gordon Brown for getting the new International Finance Facility for Immunization off the ground. Vaccines are one of the most cost-effective (and least corruptible) ways to save lives in developing countries.
Read about it here in my "day job" blog over at the Center for Global Development.
Update: 12 September – see this intelligent post at Stumbling and Mumbling on this topic.
I have a confession to make. Though I am a fully paid up lefty, I am in favour of a flat tax.
Calm down comrades. Before you take away my Guardian subscription and cut my lentil ration, hear me out. (I’m not alone. Jarndyce, also a pinko, agrees. So, to some extent, does Chris.)
Is it progressive?
A flat tax can be fairly progressive, if the tax-free allowance is quite large, though this means the marginal rate has to be higher, to get enough revenue.
I’m not too worried about the efficiency costs of a moderately high marginal tax rate. As Stumbling and Mumbling pointed out, high marginal rates may not be a very big disincentive in practice. Before you take away my subscription to The Economist as well, I do believe that incentives matter. But my guess is that for most of the population, the substitution effects are broadly offset by the income effects, and the impact on labour supply is minimal.
Admittedly, this isn’t quite as progressive as having higher marginal rates on very large incomes: but in practice those upper rates don’t raise much revenue, so they don’t make much difference to the post-tax distribution of income.
Furthermore a flat tax would, by definition, do away with a whole host of tax breaks that have been designed for the benefit of the middle classes. Getting rid of those would do more to make the tax system progressive than the regressive effects of a single tax rate.
What would it cover?
Here’s the kicker. I’m in favour of a flat tax, provided it covers all income, just like our right wing friends say. You want a broad based tax system? So do I. To ensure that there are no incentives to distort economic behaviour, all income should be taxed equally in all its forms:
- all income from capital, including dividends and interest (what I’m pleased to say we still call "unearned income") – which are currently exempt from
part of income taxNational Insurance - all capital gains, with no additional allowances and no exemption for houses
- all inherited wealth (which is a form of income to the inheritor)
- all benefits-in-kind, including company cars at full value, air miles, corporate entertainment and hospitality etc
- imputed income of home ownership
- Trusts and other instruments for avoiding tax
- income of non-domiciled residents
That should do it. If we have a broad enough tax base, we should be able to abolish National Insurance, introduce a reasonable untaxed Basic Income Guarantee, and still have a moderate flat tax on all income above the Guarantee.
Simplification
I think there was something in Nigel Lawson’s efforts to broaden the tax base and reduce tax rates. Not because lower tax rates make much difference to economic performance, but because it is fairer to get rid of all the loopholes designed by and for political lobby groups, and because it is simpler and cheaper to adminster.
The left should be bold enough to sieze this agenda, and use the natural transparency of a flat tax to expose the way in which the incomes of the wealthy are currently shielded from tax.
Update: 8 September – PSD Blog has this link to a Martin Wolf story in the FT
The mainstream media have lost interest in Darfur. Even Nicholas Kristof, who has done an outstanding job writing about this in the New York Times, has been quiet since July.
Things are not getting any better. A fuel shortage delayed the deployment of Africa Union troops, desperately needed to restore peace.
George Bush and Tony Blair, both of whom have said words to the effect that another Rwanda must not happen on their watch, are doing nothing.
We know what needs to happen. The International Crisis Group, a respected, independent, non-profit, non-governmental organisation, said this on July 6th:
The international community is failing in its responsibility to protect the inhabitants of Darfur, many of whom are still dying or face indefinite displacement from their homes. New thinking and bold action are urgently needed. The consensus to support a rough doubling of the African Union (AU) force to 7,731 troops by the end of September 2005 under the existing mandate is an inadequate response to the crisis. The mandate must be strengthened to prioritise civilian protection, and a force level of at least 12,000 to 15,000 is needed urgently now, not in nearly a year as currently envisaged.
This requires more courageous thinking by the AU, NATO, the European Union (EU), the UN and the U.S. to get adequate force levels on the ground in Darfur with an appropriate civilian protection mandate as quickly as possible, which in practical terms means within the next two months. Otherwise, security will continue to deteriorate, the hope that displaced inhabitants will ever return home will become even more distant, and prospects for a political settlement will remain dim.
What are we waiting for?
A study in The Lancet (free registration required) measures the success of a partnership to reduce measles in Africa, the Measles Initiative, started in 2001. Initial partners were the American Red Cross, the WHO, the US Centers for Disease Control and Prevention, the United Nations Foundation, and UNICEF. Subsequently, the Canadian International Development Agency, the Bill and Melinda Gates Foundation, the Church of Latterday Saints, and the Global Alliance for Vaccines and Children (GAVI) have joined the partnership. Partnership funds permitted the financing of measles campaigns.
Between 2000 and June, 2003, 82·1 million children were targeted for vaccination during initial SIA [supplemental immunisation activities - ie campaigns] in 12 countries and follow-up SIA in seven countries. The average decline in the number of reported measles cases was 91%. In 17 of the 19 countries, measles case-based surveillance confirmed that transmission of measles virus, and therefore measles deaths, had been reduced to low or very low rates. The total estimated number of deaths averted in the year 2003 was 90 043. Between 2000 and 2003 in the African Region as a whole, we estimated that the percentage decline in annual measles deaths was around 20% (90 043 of 454 000).
Source: M Otten, R Kezaala, , A Fall, B Masresha, , R Martin, L Cairns, R Eggers, R Biellik, M Grabowsky, P Strebel, J-M Okwo-Bele and D Nshimirimana, "Public-health impact of accelerated measles control in the WHO African Region 2000–03". The Lancet Volume 366, Number 9488, 3 September 2005
Overall, the Measles Initiative has mobilized more than US $144 million and has helped 33 African countries to vaccinate more than 150 million children, saving more than 500,000 lives. It costs less than a dollar to vaccinate a child against measles.
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:
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.
Matt Yglesias on why we need to play the blame game:
THE BLAME GAME. A brief comment on the subject of this game, which, apparently, it’s a bad idea to play. First off — it’s not a game. Assigning blame is a deadly serious matter. It’s also integral to any sort of viable social practice. The criminal justice system relies on assigning blame to various people and punishing them. So does the civil tort system, and so does the non-criminal regulatory system. So, for that matter, does any kind of coherent business or non-profit enterprise — when mistakes are made, you need to decide who’s to blame for them, and ensure that the culpable are sanctioned. If you don’t identify and punish the blameworthy, then people will have no reason to try to do their jobs correctly.
Politics is the same way. There’s a very serious principle-agent problem associated with public policy — the interests of government officials tend to diverge quite sharply from those of the citizens they’re supposed to be serving. This is why dictatorships tend, in practice, to ill-serve their citizens and be beset by corruption, malgovernment, and all kinds of other problems. In democracies we try, through elections and the ability of elected officials to fire their subordinates, to align those incentives. The way that works is that when bad things happen, people are supposed to blame someone, and then elect someone else to replace him. For that to do any good, you need to "play the blame game," which is to say find out who’s actually responsible.
I would add only that understanding who is responsible is an essential first step to learning what went wrong and why, and learning from the experience.
Only 22 percent of American professional economists understand the idea of opportunity cost. This is the conclusion of a study of 200 economists attending the 2005 annual meetings of the American Economic Association. They were asked this:
You won a free ticket to see an Eric Clapton concert (which has no resale value). Bob Dylan is performing on the same night and is your next-best alternative activity. Tickets to see Dylan cost $40. On any given day, you would be willing to pay up to $50 to see Dylan. Assume there are no other costs of seeing either performer. Based on this information, what is the opportunity cost of seeing Eric Clapton?
(a) $0; (b) $10; (c) $40; or (d) $50.
Not sure of the answer? What would you gain from seeing Dylan? You value it at $50, and it would cost you $40. So the net benefit to you of seeing Dylan is $10. That is the opportunity cost to you of seeing Clapton.
Among the economists at the AEA, the answers given were:
| Answer | Value |
Respondents | Percent |
| A | $0 | 50 | 25.1% |
| B | $10 | 43 | 21.6% |
| C | $40 | 51 | 25.5% |
| D | $50 | 55 | 27.6% |
The distribution of answers looks fairly random, though it is shaming to see that the correct answer was the least popular.
There are perhaps four concepts in economics that really, really matter, namely:
a. marginalism
b. opportunity cost
c. comparative advantage; and
d. efficient markets.
As a government economist, the notion of opportunity cost was my bread and butter, the reason for my daily existence. If academic economists no longer understand the idea, what are they teaching the next generation of economists?
(via Robert Frank in the New York Times)
The Guardian has an online photograph exhibition about the eight Millennium Development Goals.
Jeff Sachs’s introduction says:
This remarkable exhibition of photographs on behalf of the Millennium Development Goals brilliantly highlights our common humanity. We look at photos of people living in extreme poverty but see first and foremost their humanity and spirit and dedication, even in the midst of extreme deprivation. Their eyes don’t call for our pity but for our camaraderie and partnership and empathy.
Around 1 billion people on the planet struggle for their very survival each day, and thousands lose that struggle, succumbing to hunger, illness, and natural hazards simply because they are too poor to stay alive.
There is no reason for this kind of suffering in the 21st century. The people we see are fully capable of becoming highly productive and secure members of the world community, if they are just given a helping hand.
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.
Patti Waldmeir in today’s Financial Times (subscription required) about the death of William Rehnquist, who died on Saturday night:
a Supreme Court spokeswoman said at the weekend that his health had declined.
Yep, you could say that.
President Bush, at 10.30am this morning, arriving in Mobile Alabama:
The good news is — and it’s hard for some to see it now — that out of this chaos is going to come a fantastic Gulf Coast, like it was before. Out of the rubbles of Trent Lott’s house — he’s lost his entire house — there’s going to be a fantastic house. And I’m looking forward to sitting on the porch. (Laughter.)
Err, that would be the same Trent Lott who had to resign as Senate majority leader in 2002, for making apparently nostalgic remarks about racial segregation:
When Strom Thurmond ran for president, we voted for him. We’re proud of it. And if the rest of the country had followed our lead, we wouldn’t have had all these problems over all these years, either.
Could President Bush have thought of a more inappropriate way of empathising with the victims of Katrina?
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