Post Politics

Constructive Engagement

Tuesday, July 5th, 2005

Fareed Zakaria in How To Change Ugly Regimes and Leon Hardar in Trading, Not Invading: US Hums Different Tune on Vietnam understand what Robert Scheer and Robert Wright understand, that which apologists for the invasion of Iraq and some of its anti-market opponents do not understand. Zakaria:

I realize that it feels morally righteous and satisfying to “do something” about cruel regimes. But in doing what we so often do, we cut these countries off from the most powerful agents of change in the modern world—commerce, contact, information. To change a regime, short of waging war, you have to shift the balance of power between the state and society. Society needs to be empowered. It is civil society—private business, media, civic associations, nongovernmental organizations—that can create an atmosphere which forces change in a country. But by piling on sanctions and ensuring that a country is isolated, Washington only ensures that the state becomes ever more powerful and society remains weak and dysfunctional. In addition, the government benefits from nationalist sentiment as it stands up to the global superpower. Think of Iraq before the war, which is a rare case where multilateral sanctions were enforced. As we are discovering now, the sanctions destroyed Iraq’s middle class, its private sector and its independent institutions, but they allowed Saddam to keep control.

Bush and some of his most virulent opponents have a different understanding: markets must be spread by force, because markets are good and because markets are evil respectively.

Autonomous Liberalization

Thursday, June 23rd, 2005

Tyler Cowen gives CAFTA a very qualified endorsement which I mostly agree with. The clincher:

Failure of the treaty would be a disaster, again for symbolic reasons. Trade negotiations would slow down significantly, and the age of trade agreements might be over.

What age of trade agreements? According to the World Bank’s World Economic Prospects: Trade, Regionalism, and Development unilateral trade liberalization accounts for two thirds of tariff reductions over the past twenty years. Regional agreements like CAFTA only accounted for ten percent.

Downgrade symbolism and upgrade strategy: unilateral free trade is the way forward, followed by worldwide agreements, the latter spurred by the former. And drop the non-trade stuff, like exporting intellectual protectionism.

Still, I find it hard to not root for CAFTA, if only because the economic neanderthals on the other side are so ugly.

(CAFTA is doubtless a very ugly treaty too, with payoffs and exceptions galore. Dare I say that those pursuing treaties rather than unilateral liberalization overestimate public good problems and underestimate rent seeking problems?)

Typing International Apartheid

Saturday, June 11th, 2005

I claim that legal restrictions on the ability of people to travel, work and live across national borders is equivalent to apartheid, so naturally I’m intrigued by Randy McDonald’s Towards A Typology of Apartheid in response to a query from Jonathan Edelstein. McDonald lists six characteristics of an apartheid regime. Let’s see how the international version stacks up (read McDonald’s post for descriptions, I only reproduce openings below):

The group favouring apartheid is either a minority population or about to become a minority population.

In the case of the U.S. anti-immigration activists see an imminent threat anglo culture being swamped and ruined by hispanics and harbor fears that Mexican “elites” plan with the help of Mexicans living in the U.S. to reconquer the southwestern U.S., lost by Mexico in the war of 1848.

The group favouring apartheid believes itself to be indigenous.

In spades.

The group favouring apartheid believes that it must act immediately.

Anti-immigration activists want a “temporary” moratorium on all immigration and immediate “sealing” of the U.S.-Mexico border.

Under apartheid, each group must develop separately.

Check. They should fix their own country instead of coming here and stealing our jawbs and living off welfare, natch.

The group behind the apartheid system must establish as complete a monopoly over power as possible.

This may be a stretch, but consider the extent to which U.S. relations with and interventions in Mexico, Haiti, Cuba, and others are aimed at assuring that “they” don’t come “here” in masses.

Defending the apartheid system requires constant vigilance.

Of course. This feels like a throwaway, but I’ll note that anti-immigration activists often claim that “we” face an invasion. What but vigilance could be required?

I think McDonald may have missed two characteristics:

The apartheid system is natural. The regime only gives the force of law to the natural ordering of things. People naturally live and work in their homelands and are most comfortable in their own culture.

The apartheid system is moral. People who are not born into a culture cannot really buy into a culture and introducing these people leads to moral rot and cultural decline.

I apologize for the U.S.-centric nature of the above. Similar could be written concerning anywhere non-open borders exist, particularly where freedom and economic opportunities available to individuals differ greatly across borders.

Betting Policy Consequences

Thursday, June 9th, 2005

Michael Stastny quoting a closed Financial Times column:

President John F. Kennedy helped to revive the City of London in 1963 by imposing a tax on US investment in foreign securities. That made the international bond market move to London, allowing the City to regain its 19th century status as Wall Street’s rival in capital markets.

I did not know this bit of history. It seems like a perfect illustration of some obvious but often ignored truth, perhaps simply that policies have consequences. Consideration of more than policy advocates’ lies may be in order. Betting market prices may be one valuable source of more information.

A small irony then, that U.S. regulation is ensuring that the leading betting markets are located outside the U.S., largely in London. Eventually this may be a big deal:

It does not sound like a very worrying loss for Wall Street given its strong position in equities, bonds and derivatives. But Mr Bloomberg should watch out: in an arena of financial innovation that is rapidly converging with other forms of trading and investment, New York is drifting behind London.

As an anti-nationalist, I don’t care much where the leading markets locate; I just hate to see stupid policy implemented anywhere, including the U.S. If I were betting on the consequences of this policy I’d short New York.

Financial markets too gauche? Think through the likely consequences of heavy handed cloning regulation.

Public Goods Rent Seeking

Wednesday, June 1st, 2005

Bryan Caplan points to a fascinating paper on the economics of extreme religious groups which explains the relationship of public goods produced by such groups and sacrifice demanded by the same. Caplan writes:

The upshot is that economists overestimate the severity of public goods problems but underestimate the severity of rent-seeking.

I think Caplan probably has the upshot of this particular paper wrong (I haven’t read the whole paper carefully yet, more later perhaps) but I suspect he’s correct about a bias to overestimate public goods problems and underestimate rent seeking. I wonder if anyone has attempted to detect such a bias either experimentally (in an economics lab) or through painful survey of various popular and academic literatures?

I’m pleased that Ernest Miller made the connection to copyright, though he riffs off the weaker part of Caplan’s post.

Copyright is (should be) the textbook case of wildly overestimating the public goods problem while ignoring rent seeking problems (NB “how can an artist make a full time living doing only art” is not a public goods problem). Witness massive production of art where expected profit from sales of copies and licensing is nil, both outside the content industry and where restrictions on copying are not enforced. Consider who benefits from perpetual copyright — not the public.

Nothing has a URI, everything is available

Thursday, May 26th, 2005

Chris Masse is an old fashioned (email) networker. Most recently he sent me a couple emails regarding my aside in this post:

Another complaint about HedgeStreet and to a lesser extent TradeSports: lack of easily linkable URLs for contracts. C’mon, it’s the web, get with the program!

Back to that concern in a second. First, I noticed that Chris included me in his list of blogs about prediction markets. I got a kick out of my entry:

Mike Linksvayer’s blog – My opinions only. I do not represent any organization in this publication.

  • Category: Prediction Markets
  • Mike Linksvayer is a developer, consultant and IT manager who is into open source software and public domain—among multiple tech topics.
  • He was recently profiled by one of his former Creative Commons’ colleague.
  • I think of him as a libertarian Democrat (or a Democratic libertarian)—I’m not sure, though.
  • He’s been good to me, but I fear him. The day I’ll miss a piece, he’ll assassinate me—cold blood. (Take a look at how he teared down economist Tyler Cowen.)
  • A Robin Hanson-compatible guy.
  • OUTING: Mike Linksvayer is a TradeSports affiliate.

Not bad. I’m registered to vote as an independent though I wouldn’t be the least bit upset if libertarian Democrats had some success.

Back to my complaint. Chris has a page with links to all(?) TradeSports markets. I was aware of these market URLs, and of URLs for individual contracts (beware: this content will attempt to resize your browser winodw). That’s why I said “to a lesser extent for TradeSports.” However, these URLs are obviously designed without consideration of access other than via the larger TradeSports website. They never appear in your browser’s URL bar, making them a pain to discover and they’re either incomplete or badly behaved.

If the Trade Exchange Network wants to be the authoritative prediction markets maker (interesting that they’re seeking to be a CFTC regulated exchange) one tiny step would be to make it easy for people to link to them. Better yet each market and contract would have a feed. Even better yet, an API for accessing market data and generating custom charts. In other words, take several cues from Amazon, eBay, and many others.

Apologies to Hassan i Sabbah’s legend.

Open the H1B Gates

Wednesday, April 27th, 2005

Credit (and blame) where due: Kudos to Bill Gates for clearly saying that H-1B caps should be scrapped. Yes, and so should all other restrictions on travel and work across borders.

Gates and others have warned that American companies need foreign engineering talent to stay competitive. I believe that is the case for most businesses, but if there was an exception it should be Microsoft. There should be no advantage to being close to the customer in developing shrink-wrap software, as the customer is everywhere. Why should a shrink-wrap developer care about where engineering talent is located? Why not, e.g., move all Microsoft Office development to Hyderabad? Inertia I suppose. It may be hard to relocate Office development anywhere outside the Seattle area. Surely any wholly new shrink-wrap development teams ought to be located outside the U.S, barring H-1B liberalization.

Via Techdirt.

Manifesto for the Abolition of International Apartheid

Tuesday, April 26th, 2005

Today I discovered and now wholly endorse the Manifesto for the Abolition of International Apartheid written in 1997 by Yves Bonnardel and David Olivier. A plain copy without intrusive Lycos France ads is here. Read it.

More forthcoming and previous in my apartheid category.

Update 20120126: Replaced the first link above with the manifesto’s current site; http://membres.lycos.fr/maai/ and wayback archive of same missing full document.

Apartheid for Musicians

Monday, April 25th, 2005

David Byrne writes about the denial of visas to foreign performers. His journal does not have permalinks, so look for the April 16 entry. Boing Boing posted a relevant excerpt, but to get a feel for how hard it is to plan a U.S. tour with non-U.S. citizens, read Byrne’s full post.

Byrne chalks it up to “cultural censorship” and writes that “this has less to do with Homeland security and more to do with keeping the American public ignorant and free of foreign influence and inspiration.”

There may be something to that, but the reason musicians and other performers require special hard to obtain visas (P visas and O visas) has more to do with protecting American musicians from competition. In the early 1900s the American Federation of Musicians successfully lobbied to restrict admission of musicians into the US.

Statutory protection of a set of workers determined largely by birth, a familiar story.

Of course the system is ripe for abuse. Cultural censorship is bad result, but there is much worse (I understand that sadly this movie is accurate; eventually I will write a post about it).

End restrictions on the ability to travel, live and work where one pleases. Apartheid is unacceptable within national borders and should be equally unacceptable across national borders.

Really Offshoring

Wednesday, April 20th, 2005

Supposedly SeaCode (sea-code.com site forthcoming) is planning to set up a software development office on a used cruise ship in international waters off the southern California coast and potentially wherever customers are nearby international waters.

I love this idea. Two of the largest hurdles to fully utilizing the world’s talent and achieving equal pay for equal work are geographical and political:

  • Much human capital is located far away from much investment capital, in very different time zones.
  • It can be hard for investment capital to move to where human capital is due to a bad business environment in the latter location (e.g., terrible infrastructure, high corruption).
  • It is hard for human capital to move to where investment capital is due to immigration apartheid laws.

SeaCode could do a nice run around all of these.

However, I’d guess that ships are fairly expensive to maintain. If this practice grows perhaps it will be a good seastead business model.

John Dvorak should be ashamed of himself for promoting apartheid.

Via Boing Boing.

Addendum 20050423: Walt Patrick pointed out on a mailing list the story of offshore gambling ships in the 1930s. Same location offshore Los Angeles. Sounds like a made for film story:

[Earl] Warren rounded up a flotilla of State and Game boats, manned them with deputies and ordered them out to the Rex. Cornero was ready and repelled the invasion with high pressure hoses. The authorities laid siege for nine tense days while Cornero’s men stood guard with sub-machine guns. His attorneys filed suit after suit charging Warren with everything from harassment to piracy.