Some on the Left believe the @MontPelerinSoc is the ringmaster of a vast neo-liberal conspiracy

bookjacket Cover: The Road from Mont Pèlerin in HARDCOVER

Few had even heard of the Mont Pelerin Society until the late 1990s and the internet age. The ringmaster of the neoliberal conspiracy still has a very ordinary looking webpage.

Lead conspirator Hayek was so little known at his death in 1992 that finding extensive obituaries of him in newspapers is hard. Some may be behind pay walls. Of those that were found, they weren’t very long and forgot to mention Hayek as the leader of a global cabal that rule the waves  :

When Keynesian thought prevailed and his reputation went into eclipse, Mr. Hayek turned to philosophy and psychology, which he first taught at the University of Chicago, where he wrote what many consider to be a second masterpiece, “The Constitution of Liberty “.

His son’s obituaries in 2006 were longer and more fulsome than his father’s mostly on the back of who his now famous father were:

Lawrence Hayek escaped from the formidable shadow of his father, the great economist-philosopher, Professor F. A. Hayek, into high-level medical research within the NHS, only to spend much of his final decade responding to the worldwide interest in the scholar many regard — along with Milton Friedman — as the father of Thatcherism.

Hayek, the Mont Pelerin Society’s and neoliberal conspiracy’s alleged linchpin wasn’t even able to get a job in the University of Chicago economics department. Along with Mises, their salaries were paid by a private foundation. Neither could get paid university appointments in the United States. Hayek was Keynes’s principal critic in the 1930s, and upon Keynes’s death in 1946, the most famous economist in the world at that time.

Despite being a colony of the vast neo-liberal conspiracy, mentioning Milton Friedman’s name in the 1980s at job interviews in Canberra would have been extremely career limiting. Not much better in the early 1990s.

  • Back in the 1980s, the much less radical Milton Friedman was just graduating from being ‘a wild man in the wings’ to just a suspicious character in policy circles.
  • If you name dropped Hayek in the 1980s and 1990s, any sign of name recognition would have indicated that you were been interviewed by educated people.

How times has changed. The reasons are well summarised by Bruce Caldwell:

But how important were [members of the Mont Pèlerin Society] in the emerging global consensus that began in the 1980s in favour of trade liberalization and privatization?

Were not, for example, the dismal performance of Keynesian demand management policies in the United States, Britain, and elsewhere in the 1970s; the heavy-handed actions of the trade unions in Britain during the “Winter of Discontent”; the sclerotic performance of countries like India who had embraced a modified version of the planning model for their own; and, of course, the patent economic and political failures of the East Bloc, far more important in turning the tide, however briefly, towards globalization?

Was not George Stigler (himself a founding member of the Society) right in his comment about economists that “our influence appears to be powerful only when we support policies ripe for adoption” (Stigler 1987, p. 11)?

see Daniel Stedman Jones (2012). Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics and P. Mirowski and D. Plehwe, eds. (2009), The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective for the handbook on the cabal leading the vast right-wing conspiracy. For example,

The Road from Mont Pèlerin presents the key debates and conflicts that occurred among neoliberal scholars and their political and corporate allies regarding trade unions, development economics, antitrust policies, and the influence of philanthropy. The book captures the depth and complexity of the neoliberal “thought collective” while examining the numerous ways that neoliberal discourse has come to shape the global economy.

Masters of the Universe traces the ascendancy of neoliberalism from the academy of interwar Europe to supremacy under Reagan and Thatcher and in the decades since. Daniel Stedman Jones argues that there was nothing inevitable about the victory of free-market politics. Far from being the story of the simple triumph of right-wing ideas, the neoliberal breakthrough was contingent on the economic crises of the 1970s and the acceptance of the need for new policies by the political left.

John Rawls and war and peace and temporary doves


John Rawls’ Law of Peoples had as its key point that the fundamental division is not between democratic and non-democratic peoples or liberal and non-liberal, but decent and non-decent or outlaw peoples. Decent peoples allow toleration and subscribe to eight principles:

  1. Peoples are free and independent, and their freedom and independence are to be respected by other peoples.

  2. Peoples are to observe treaties and undertakings.

  3. Peoples are equal and are parties to the agreements that bind them.

  4. Peoples are to observe a duty of non-intervention.

  5. Peoples have the right of self-defence but no right to instigate war for reasons other than self-defence.

  6. Peoples are to honour human rights.

  7. Peoples are to observe certain specified restrictions in the conduct of war.

  8. Peoples have a duty to assist other peoples living under unfavourable conditions that prevent their having a just or decent political and social regime.

Libertarians such as Murray Rothbard define a just war thus:

· A just war exists when a people tries to ward off the threat of coercive domination by another people, or to overthrow an already-existing domination; and

· A war is unjust, when a people try to impose domination on another people, or try to retain an already existing coercive rule over them.

A condition for a just war is force may be used only after all peaceful and viable alternatives have been seriously tried and exhausted or are clearly not practical.

Most of all, save me from self-styled anti-war activists what Matt Welch called temporary doves. Temporary doves spit bile at those that support the wars they oppose – denouncing them as moral pigmies. The temporary doves then make exceptions for the wars they support and spite bile once again at those that question the whimsical nature and application of their values about just and unjust wars and the just conduct of wars.

The wars championed by the temporary doves can be equally or more bloody in civilian casualties as the wars they oppose either because of the reasons they were started or because of how these wars are conducted – civilian casualties In Iraq and Afghanistan.

Civilian casualties are put forward by the temporary doves as a moral trump card against the Iraq and Afghan wars and the atomic bombings. Many of the architects and champions of the NATO bombings in the Kosovo war opposed Gulf War II. Slobodan Milosevic, like Saddam Hussein, was described as a modern-day Hitler, eager to practice genocide against minorities and menace peaceful neighbours.

Is Bill Clinton a war criminal because he bombed Iraq and Sudan, but a human rights hero because he bombed Serbia? All of these bombings resulted in civilian deaths.

The supporters of both wars frequently invoked the Munich Agreement of 1938 and sought regime change. Perhaps less bloody but certainly slower social and political emancipation from oppression and mass murder is OK for the temporary doves for Iraq and Afghanistan but not for Kosovo. Temporary doves are just as prepared to wade up to their armpits in civilian casualties as the next warmonger, but they then put themselves forward as free of sin when they call for war crimes trials and citizen’s arrests of those that supported and conducted equally bloody wars.

Edward Luttwick argued that the Kosovo war proved that precision modern air bombardments can be effective as humanitarian interventions only in unique circumstances:

• An enemy sufficiently economically developed to offer targets worth bombing, and
• sufficiently democratic to respond to the inconvenience thereby inflicted on civilians at large; and
• yet sufficiently primitive and authoritarian to become the target of a humanitarian bombing campaign in the first place.

In most cases, from the Taliban’s Afghanistan to Zaire and from Rwanda to Sierra Leone, there were no identifiable, high-value, and relevant targets. In Bosnia, the post-heroic behaviour of almost all peacekeeping troops in UN service ranged from doing little or nothing to protect civilians while engaging in every possible form of misconduct, from black-market trafficking to cowardly passivity in the face of mass murder.

Join the Green Tea Party | Terry Anderson

Kermit

…ask yourself an important question: Are you really an environmentalist, or are you just “greener than thou.” Membership in the Green tea party requires more than just displaying your green bona fides. It requires proven environmental results and pragmatic environmental policies—not just green rhetoric…

With only two planks, the Green tea party’s platform would make it clear that prosperity and incentives, not bureaucracies, drive environmental improvements.

The first plank is that wealthier is healthier. From the United States to the former Soviet Union, data show that economic growth is necessary for environmental improvement, not the enemy of it. The overwhelming evidence says that economic growth results from secure property rights and a strong rule of law.

Given this, we have a recipe for improving the environment that starts with economic progress and a robust private sector. More federal spending and bureaucratic red tape work against these goals. Environmental quality cannot be secured with taxpayer dollars and environmental protection agency  regulations.

The second plank is that incentives matter. The Green tea party would use the carrot—property rights and markets—rather than the regulatory stick to improve environmental quality. Kermit agrees with the great conservationist, Aldo Leopold, who said, “Conservation will ultimately boil down to rewarding the private landowner who conserves the public interest.”

Sustainability only comes from profitability and accountability.

via Join the Green Tea Party | Hoover Institution.

Robert Lucas on the causes of business cycles

I was [initially] convinced by Friedman and Schwartz that the 1929-33 down turn was induced by monetary factors…

I concluded that a good starting point for theory would be the working hypothesis that all depressions are mainly monetary in origin. Ed Prescott was sceptical about this strategy from the beginning…

I now believe that the evidence on post-war recessions (up to but not including the one we are now in) overwhelmingly supports the dominant importance of real shocks.

But I remain convinced of the importance of financial shocks in the 1930s and the years after 2008. Of course, this means I have to renounce the view that business cycles are all alike!

Robert Lucas Jr.

Our attempted carjacking

We were driving home the other night when the two cars in front of us came to a stop after we left the roundabout near the airport.

When they had slowly cleared the left lane of the highway, a young man was walking towards the traffic. He was obviously on drugs – the glazed look and strange walking.

I moved the car around him slowly and locked the car without much thought.

Half a second later, I hear the outside door handle on Luz’s side of the car. This lunatic was trying to break into moving cars on the highway.

I immediately sped away. I did not care about him. I wanted to get away as quickly as possible

We drove home, which is about two minutes away, then we rang the police. After a little bit of time working out the exact name of the street, they said they had received a number of reports about a man on the highway and police had been sent.

If I heard any bump or other evidence that he was actually injured as I sped away, I would have still sped away. There is a difference between leaving the scene of an accident and fleeing a carjacking by a crazed drug fiend.

If there was any suspicion that I had injured the carjacker while speeding away, I would have driven to the nearest police station, which is nearby, given them a summary of the facts and then postponed further comment pending legal advice.

So much for sleepy Wellington.

Europe has extensive experience with currency union break-ups

  • The Latin Monetary Union (LMU) joined Belgium, Italy, and Switzerland together with France in 1867. The arrangement managed to hold together until the generalized breakdown of global monetary relations during World War I.
  • The Scandinavian Monetary Union (SMU) formed in 1873 by Sweden and Denmark and two years later by Norway. This was disrupted by the suspension of convertibility and floating of individual currencies at the start of World War I. the agreement was finally abandoned in 1931.
  • The Austro-German Monetary Union was dissolved in less than a decade following Austria’s defeat in the 1866 Austro-Prussian War.
  • The only truly successful monetary union in Europe came in 1922 with the birth of the Belgium-Luxembourg Economic Union (BLEU), which remained in force for more than seven decades until 1999.
  • Europe in the twentieth century has also seen the disintegration of several monetary unions, usually as a by-product of political dissolutions.
  • A celebrated instance is after the Austro-Hungarian Empire was dismembered by the Treaty of Versailles. Almost immediately, in an abrupt and quite chaotic manner, new five currencies were introduced.
  • There also have been British and French currency unions with and between colonies.

Since World War II, economies have exited currency unions at an average rate of one per year.

Andrew Rose found

…that countries leaving currency unions tend to be larger, richer, and more democratic; they also tend to experience somewhat higher inflation.

Most strikingly, there is remarkably little macroeconomic volatility around the time of currency union dissolutions, [emphasis added] and only a poor linkage between monetary and political independence.

Indeed, aggregate macroeconomic features of the economy do a poor job in predicting currency union exits.

Rather than saying Euroland cannot fall, the discussion should be dissolutions of currency unions are common, especially when Greece is a member. What happened? How was it done?

HT: Monetary Unions.

The punishment dilemma versus cutting the road toll Norwegian style

Traffic offences are example of the punishment dilemma: there but for the grace of god I as the offender.

DUI

That makes voters, most of who drive a car, reluctant to support strong punishments for crimes they might happen to commit somewhat accidentally rather than through some malicious intent.

Traffic offences are the breaches of the law  where ordinary citizens are most likely to have encounters with the police and the courts.

This is where the punishment dilemma between obeying the law and brute self-interest are at their sharpest. Everyone wants other people to obey the law , but they are not so sure about themselves, especially when the punishments are harsh.

Juries would not convict drivers for manslaughter so new offences such death by dangerous driving and by negligent driving were introduced with lighter prison terms. People would get a few months for killing people when drunk.

That has changed in recent decades with a hardening of community attitudes to dangerous driving and drunk driving.

An important reason is that with rising incomes, more people can afford a taxi so they a less likely to go down the steps because they are less likely to be caught in a situation of drink-driving or dangerous driving.

Norway has the strictest drink driving laws in Europe:

  • The maximum blood alcohol content is equal to a small glass of a weak drink and heavy punishments with few second chances.
  • The blood-alcohol limit for impaired driving is .02, with stiffer penalties for every point over that.
  • Driving under the influence of alcohol is punishable by at least 1 day in jail, a heavy fine and the loss of the driver’s license for a year.
  • Driving with a blood alcohol level of over 1.5 may lead to one year of prison.

Many Norwegians take a taxi to parties while others make arrangements to stay over with the hosts.

The vast right wing conspiracy is done so on the cheap when you follow the money

Much is made of how the Cato Institute and the American Enterprise Institute are funded by the Koch Brothers to act as their propagandists. Greenpeace and Right Wing was good enough to follow the money:

  • American Enterprise Institute: $350,000 in total between 2004 and 2011 as compared to an annual income of $25 million.
  • Cato Institute $ 5.35 million over 14 years. Their last  annual donation in excess of $250,000 was in 2001. Its annual income is $12 million.

Chickenfeed – on an annual basis, this financial largess would barely pay for a cheap research assistant in a small office out of the Cato’s 90 staff members and 60-adjunct scholars. An average congressman raises more than this in political donations each year. Romney and Obama each spent $1 billion on their presidential campaigns.

Karl Popper argued that who made an argument is of little value. What matters is critical discussion of what they said. Knowledge grows through critical discussion.

Peter Drucker made similar points about people with great strengths also come with great flaws. (Biography sales would be 1/10th of its size if the great were not flawed).

Drucker championed a business rule of never making a decision until there is disagreement; only then do you know the boundary of what you plan to do. Unless one has considered alternatives, one has a closed mind.  This above all, explains why effective decision-makers deliberately disregard the second major command of the textbooks on decision-making and create dissension and disagreement, rather than consensus.

Decisions of the kind the executive has to make are not made well by acclamation. They are made well only if based on the clash of conflicting views, the dialogue between different points of view, the choice between different judgments. The first rule in decision-making is that one does not make a decision unless there is disagreement

The peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error.  - John Stuart Mill

The U.S. and Euro-zone non-recoveries

Screen_shot_2014-06-13_at_11.50.26_am

HT: Vox.com from oecd.org

Billy Connolly – Terrorist Attack At Glasgow Airport, Must Watch!

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