Learning Science in song

What do you do when a colleague asks "What is the second law of thermodynamics"? In our office two people go straight to Flanders and Swan. This is quickly followed with the suggestion of Monty Python for astrophysics (or the universe at least) Then yet another of the classics with Tom Lehrer on chemistry (more specifically Chemistry) Which then led to a suggestion for zoology, about which I'm not so sure about Bad enough, but it is also a place where you don't want to use a greengrocer's apostrophe.

Even remnant parties have factions and discord

Twitter is - perhaps surprisingly to some - not a private communications channel. Courtesy of that fact we can see that there is apparently a lack of harmony among the members of the Australian Democrats. Part of the untold story of the Democrats is how, beginning with the GST deal, the party successfully managed to jettison large slabs of its membership through winner-take-all stoushes.

How about no absolution without genuine repentence

So the Catholic Church is worried that the secular state is going to at last look to break the "seal of confession" - at least for child abuse. How about a much simpler approach by the church. Absolution comes not just from confessing to God and asking his fogiveness, and saying some words, but from confessing to society and asking for fogiveness from your victims. That would be a real response.

Taking Agent Based Computational Economics to a new level

A greast little item in the SMH today about an economist applying theory to the question of the economies inside online games. A couple of interesting comments are included, For example, many would agree that; "Professor Varoufakis believes economics has ''hit the wall'' as a credible source of policy insight because its mathematical models are ''irrelevant'' or even ''dangerously wrong'', crippled by the lack of sufficiently accurate, complete and timely real life data." The kinds of events like asset bubbles and banking crises occur, despite theory, because of the interaction between agents tin the formation of prefernces that is ignored by traditioonal economics - and can't be reliably modeled. The interaction between agents is in pat transmitted by the fact that preferences are formed by expectation of future events - houses can be valued on the basis of their rental income (or the opportunity saving of not paying rent) or on the basis of their future value for esale. Bubbles grow as the latter becomes more important in valuation than the former. They pop when the gap between the two becomes so large that valuations start shifting back to the former. The article notes that; "Part of the aim is to avoid speculative bubbles and banking crises such as the one in Second Life that caused players to lose $750,000 in real money in 2007. He is also analysing the transactional data for its ''tremendous theoretical and empirical interest'' and writing a Valve blog." Question - do you think the makers of Stream could be encouraged to make a version of a game that could be played by economics students with the intention of testing the boundaries of collapse?

No comment

We all know the US plays rough to defend its industries, but is it playing rough when they attack a firm in an industry that they "invented and developed ... but is largely out of the business now"?

How to stop extremists

The Daily Terror has today calculated the increase in Australian overseas aid since 2008 and claimed the increase was all about getting a seat on the UN Security Council. It could of course simply be increased overseas aid. Meanwhile The Economist has reported on the case of Nigeria. This is yet another case where poverty and a dysfunctional state leads to extremists. So just maybe the Terror could have said the increased aid was part of trying to rid the world of extremism.

For the Tin Foil Hat Brigade

Great scholarly article on The Effectiveness of Aluminium Foil Helmets. A must read.

Inconsistency

When is trawling through the deepest recesses of the internet to resurface claims about events 17 years ago that have already been answered "holding to account"? How can Chris Pyne yesterday look at a camera with a straight face and suggest that any of that had anything to do with actions that have been in court? When is assault - throwing a punch to make someone be afraid - anything other than assault, and not just the "rough and tumble" of student politics? How can a person whose approach to politics was "robust" using intimidation and hateful language (mostly directed at gays) come out and attack people who use similar tactics for their own cause?

Quiggin on Posner

Folks, a good simple read from Joghn Quiggin on how Richard Posner, leader of the Law and Economics cheer squad for the Republicans has changed his mind. Quiggin writes, "Posner is one of a small minority on the intellectual right who have responded to the economic crisis by changing their view of the world, rather than by finding more and more absurd defenses of the indefensible." Reminiscent of the line attributed to Keynes "When the facts change, I change my mind. What do you do, sir?"

Abbott and language

This has been an amazing week. At least the SMH got it right in yesterday's editorial when they noted the absence of anything amounting to policy. Senator Conroy's media releases covered the NBN bit. The SMH however saw fit to say nice things about the Abbott commitment to teaching foreign languages. I won't here go into the fact that such teaching would be advanced by the NBN. The question is the need, the observation is the hypocrisy. Australia is actually a linguistically diverse nation due to its high levels of immigration. But the single most important language to speak is English. That's what the Europeans an Asians all most want to learn. Better resource use would be to boost English language training to others in the region. But the policy stands in stark contrast to opposition to multiculturalism. That opposition takes the form of objecting to the useof community languages and encourages migrants to integrate. So Abbott's view is that if you already speak a language other than English you shouldn't, but if you don't speak a language other than English you should learn one. And this man is taken seriously? Wake up Australia.

Reporting the "news"

If Chicken Little runs around and says "The sky is falling" it could be reported in three ways. The first way would be "The sky is falling". This would be inaccurate. The second would be "Today Chicken Little claimed that the sky is falling." This would be a completely accurate report but of little value. The third would be "Today Chicken Little lied. Little claimed that the sky is falling. Investigations reveal it is not." This would be a completely accurate and highly valuable report. We call the third one "journalism". I wonder which one of the three ways of reporting will be used to cover politics tonight. Experience is rapidly telling me that it is most often the second, sometimes the first. Very very seldom is it the third, even amongst those outlets who talk about the need to fund "investigative journalism."

The Liberals and Indigenous Australians

So that's twice in recent times the Labor PM has saved the Opposition Leader from the consequence of a gaffe over indigenous affairs.

The first was Kevin Rudd helping Brendon Nelson over the disaster that was his address in the Apology by going across the chamber to get Nelson to accompany the elders into the Parliament.

Then yesterday we had Julia Gillard ensuring her security detail escorted Tony Abbott as well as her out fro the Lobby restaurant.

It transpires today that the activities that the PM regretted for disrupting the ceremony were in part caused by one of her staff being in a communication chain that passed on Mr Abbott's planned location for the day to the protesters. It doesn't seem to be he wo informed them of Mr Abbott's view that the Tent Embassy had passed its useful time. It wasn't he or anyone else that inspired Mr Abbott to assert that really we'd taken care of aborigines now with the apology and possible constitutional recognition so they didn't need their Embassy.

The Liberals in Government are notable for the demolition of ATSIC (for goodish reasons) and the NT intervention. No matter how honestly motivated the latter was it was as poorly executed a piece of paternalism as was taking half-caste children from their parents.

Perhaps, rather than saying it is tme the Tent Embassy moved on, we should consider the value of a permanent "embassy" - a place of representation of the indigenous Australians - within the Parliamentary triangle. And perhaps National Australia Day/Invasion Day/Survival Day ceremonies could start with a smoking ceremony there like NSW ones do with a smoking ceremony at Farm Cove.

It would be more useful than the former ATSIC building stuck over by the Museum of Australia.

I note that Google Maps identifies an area between Old Parliament House and the lake as "Reconciliation Place" - but it just seems to be a circle. If that is indeed what it is - more needs to be made of it.


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Kodak

Anyone observing the latest chapter in the Kodak story would do well to read Clayton Christiansen's The Innovator's Dilemma.

Kodak, you see, invented digital photography but didn't invest for fear of cannibalising the film business. This the only technology choice where this occurred.

There ought to be a saying somewhere, if you don't cannibalise your own business you will just end up road kill.

That said, this is the US, and "bankruptcy" doesn't mean what we think it means.


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Not Blogging Really

Anyone in Australia thinking of the idea of primaries should take a bit of a look at what happens in the US.

This ad is run by Newt Ginrich to destroy the credibility of Mitt Romney.



But Ron Paul goes one better and just attacks Newt and Mitt.



But when you follow these links you find a really monumental pro-Ron Paul piece which argues that a non-interventionist Foreign Policy as proposed by Paul ticks the Libertarian boxes.



It is frightening that Julie Borowski - who describes herself as TokenLibertarianGirl on YouTube - can hold such views so young. But then again anyone in their early to mid twenties who wears pearls like those is a bit doubtful to begin with. I guess Tanya Costello (nee Coleman) was just like her at that age.

Anyhow, she has conveniently told us the libertarian books she recommends. Some of the more serious of these I have read - and they are as dangerous nonsense as Marx's Capital or Hitler's Mein Kampf. Simple prescriptions unbounded by empirical evidence. More fascinating still is that she holds up Bastiat's The Law telling us how politicians use the Law to take away our freedom.

The fascinating part is that this volume is getting close to two hundred years old and describes a slightly different world. However, Bastiat was at his best using a method of rhetoric that outlined the stupidity of some policy proposals - as for example his item on a Negative Railroad.

Should we start a charity to rescue young people from the libertarian fold - like a variety of a cult busting group?


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The Iron Lady - Verdict

The Iron Lady is a disappointing film, but not for all the reasons outlined in John Huxley's column today.

It wasn't merely "revisionism", and the long-term effect of Thatcher on Britain is something on which rational intelligent informed people could disagree. Far from being toned down "Thatcherism" it demonstrated how her downfall within her own party was determined by th excesses to which she took that with the poll tax.

But the film itself spends too long on an interpolated latter life Thatcher, and nowhere near enough on her formative years. For that read Wikipedia.

Interestingly at the time we observed similarities between Malcolm Fraser and Margaret Thatcher, and what they had most in common was a political philosophy derived from a rejection of totalitarianism and all forms of state control. To understand either read Hayek's The Road to Surfdom. The difference is that Fraser never lost his classic "liberalism" whereas thatcher seems to have lost hers - and the difference could be in the difference between the patrician and the grocer's girl fighting class and sexism.

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To my loyal reader(s)

As reported in CommsDay today I will be commencing a gig as Temporary Special Adviser to Senator Conroy starting Monday.

Writing a blog is inconsistent with the role. While some of my esoteric pieces on the nature of religion, the global sweep of history and heterodox economics might be legitimate independent comment, those who know me well know I would find it hard not to stray.

It does leave some current unfinished business - not least was a post I was going to write about broadband pricing built on some recent analysis by Benoit Felten on the ways to manage bandwidth hogs.

So, we now adopt radio silence.


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The Corporation - Part 2

Nice little piece today from Ross Gittins on suggestions for a "relational business charter".

In part it goes to the same territory as my comments on the corporation. But only in part.

The question is more how would you get firm's to pursue the objectives given the myth of "maximising returns". The answer is more that the public policy debate needs a better understanding of the role of the firm and feel comfortable regulating them to achieve the wider objective.


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Heterodoxy Unbound

I have spent the last two days at the conference of the Australian Society of Heterodox Economists.

The conference re-established a core point - the heterodox are united by what they stand against rather than what they stand for.

What they stand against is the dominant paradigm of the neo-classical core of economics. But even how much they stand against this varies.

Universally they would argue that neo-classicism fails because it is a system that assumes that the economic system is inherently stable and that analysis begins with an economy in equilibrium. You would probably get general agreement on the proposition that the neo-classical core ignores money and hence largely ignores the finance system, yet the latter accounts for 20% of US economic activity.

Going further you might actually get them to agree that the weaknesses of neo-classicism begin with the three core assumptions of Methodological individualism, methodological instrumentalism and methodological equilibriation.

I approach the heterodox economists from a telco policy stance where I am astounded how the terms "efficiency" and "competition" get chanted with no understanding of the limitations the theory of neo-classicism itself would impose on them, let alone all the other potential fallacies.

An interesting part of the conference was a session proposing a mathematically modelled macro system including finance that was attacked for not having "micro-foundations". This ignores the good conversation that the Hicks co-option of Keynes to give it "micro-foundations" was the point at which Keynes became misunderstood. It also assumes that microeconomics itself is well founded and that the issues are merely to do with macro.

Steve Keen eloquently describes the failures of micro - indeed its internal inconsistency - in his Debunking Economics.

There was so much good in the conference - but the paper by Lynne Chester that distinguished Australia from being characterised as a Liberal Market-Based Economy was a stand-out. Working backward, Australia's relatively better performance than the true LMEs (US, UK even Canada) can be attributed to its different institutional structure - the Australian approach to wage fixation, highest bank capital adequacy requirements.

To put it another way, as economies rushed to implement market mechanisms to facilitate the structural adjustments necessary to respond to the oil supply shock - seen as stagflation - Australia did so in an effective way that created just enough flexibility without overshooting.

There were interesting discussions on central bank policy - with different views of whether central banks in setting official interest rates can or cannot effect employment. The latter view was accompanied by a call for more explicit specification of a "full employment" goal.

In the end the conference had a discussion about the future of heterodox economics - and ultimately the question is whether the goal is the overthrow of the orthodoxy or not. Some, like Keen, think the orthodoxy is so dangerous it needs to be overthrown. Others regard the orthodoxy as being too ingrained to be rebelled against (and one could argue their approach to Keynes is evidence of that - on which the best paper on Keynes was given by UTS's Rod O'Donnell but the paper doesn't appear to be available anywhere).

Yet others see the real benefit in the heterodox as being its pluralism - the fact that it permits economics to be looked at from different dimensions.

My own view is that we do need a true "paradigm shift" but that the shift needs to be to a pluralism - to the kind of world like mechanics in which Newton, quantum and relativistic mechanics can co-exist because the boundary conditions are well understood. The overall title of the new paradigm will be "complexity economics" because that is the consequence of putting institutions directly into models - they create feedback loops.

Finally there is the question of the relation between heterodox and political economy. The latter was the original term for the field when the focus was on how to make wealth. It was inherently prescriptive not merely descriptive. The term is now also used to explain how the neo-classical position operates to support the entrenched power positions (the definition of efficiency says that the preference of the person with the most endowments counts more).

For me this is the piece that simply blows up the cant that economics is a "positive science". If it were only such there would be no preference for economists in policy roles.

Anyhow - short summary - great conference and we all need to pay more hede to the heterodox and spurn the orthodox.

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Weird comments

I just moderated a weird comment on a post about the University of Sydney rebranding.

The comment made reference to a supposed "secret society" called the "Integralia." Further research has thrown up a short item in Honi Soit that provides good evidence that the existence of the society is an organised hoax.

The hoax is centred on its own wikispace and seems to be actively centred on a campaign to dis-empower the (already powereless) SRC.

I guess it is just Tony Abbott in the age of the Internet.


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Update on Canada

Thanks to Catherine Middleton for alerting me that the story on easing foreign ownership restrictions in Canada is premature.

The relevant Minister did indicate that change is underway but will not be unveiled till 2012.

He interestingly is reported to have said "the government expects cellphone companies to offer rural Canadians the same services as those living in cities." Canada faces the same kind of geographic issues as Australia - though less urbanised. Vast thinly populated areas are extremely hard to provide metro like mobile coverage to. The only way such an expectation can be fulfilled is to put "must build" criteria on licences (as indeed the original Australian GSM licences had).


Middleton has provided a neat summary of telecommunications in Canada in the TJA. In it she notes a wireless market structure much like Australia's and that "99% of the population has access to 2G or 3G service
(which covers only 20% of the country's geographic area)" The Australian comparison is something like 98% of the population and 25% of the land mass (when a car kit is included)though real data is hard to obtain. (The landmass figure was provided in the Glasson report at P.125 and may well have increased since.)

The comparison between Australia and Canada is otherwise interesting. We have a well developed infrastructure strategy, and at least an attempt at a Digital Economy strategy.

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