Levantine blood feud, part MMXXXIV

As I type this, a motley group of  ships are sailing from Cyprus towards the Gaza Strip in an effort to deliver 10,000 tonnes of supplies, in direct opposition to Israel’s blockade of the territory. The blockade has been in place since June 2007, when Hamas won a violent conflict with Fatah after coming first in the Palestinian parliamentary election in 2006 (a victory unrecognised by the international community). The problem with fostering democracy is that sometimes the “wrong people” win. Fatah was ejected from the Gaza Strip, where Hamas is strongest, but retained control of the West Bank. Well, as much control as it is allowed by Israel, anyway.

Under the 1993 Oslo Accords, which established the Palestinian Authority and gave it limited administrative powers over the Palestinian territories, Israel maintained control over Gaza’s land borders, its airspace, and its territorial waters. To that end, Israel built a barrier around Gaza that was mostly torn down during the 2000 Intifada, then rebuilt. Gaza was completely sealed off in 2004, when a barrier was built along the Gaza-Egypt border. In 2005, Ariel Sharon managed to engineer a full withdrawal of Israeli “settlers” and IDF soldiers from the Gaza Strip, though Israel retained control over Gaza’s borders, airspace, coastline, power (which mostly comes from Israel), and of course its import and exports. The withdrawal has been criticised from all sides (as would any substantial action in such a polarised environment) and can be viewed as a real attempt to advance the peace process, or as a cynical move to try to get rid of the “Gaza problem”. However, Sharon’s chief of staff pointed to a third, more strategic, reason – to make the peace process more difficult, and delay the formation of a Palestinian state.

No-one has been able to get hold of a definitive list of allowed imports, but it can be said that only the bare necessities are sent in – basic foodstuffs, clothing, some medical and school supplies, some chemicals and fertilisers, things like that. The amount of food let in is much less than previously – according to UN Special Rapporteur Richard Falk “only barely enough food and fuel … to stave off mass famine and disease”. Falk has been criticised as blatantly biased against Israel, and there’s something to be said for that, but he’s not alone in condemning the consequences of the blockade. Oxfam, Amnesty International, other aid groups, the UN Secretary-General and the Pope have all called for its lifting or easing. The primary objection is that it constitutes “collective punishment” of innocent Gazans for the crimes of its Hamas leaders. From the Goldstone report:

Israeli acts that deprive Palestinians in the Gaza Strip of their means of subsistence, employment, housing and water, that deny their freedom of movement and their right to leave and enter their own country, that limit their rights to access a court of law and an effective remedy, could lead a competent court to find that the crime of persecution, a crime against humanity, has been committed.

The current situation is difficult to classify. This is important, because occupying powers have obligations under international law that mere neighbours do not. Israel claims that, since it has no-one inside Gaza, clearly it is no longer occupied. The fact that Israel has effective control of everything going in and out, barring the smugglers’ tunnels, is problematic for that argument. Most independent assessments have concluded that Israel is still occupying Gaza even if it has no troops on the ground, including the authoritative judgment of the International Court of Justice. This means that, under the Fourth Geneva Convention, Israel has responsibility for the wellbeing of the Gaza population.

Israel takes a different view. It says that since the withdrawal, it is in a state of armed conflict with an entity ruled by terrorists, and therefore a blockade is a perfectly legitimate tactic. It cites the many economic sanctions used elsewhere, and the validity of maritime blockades in times of armed conflict. If we take the claims at face value, they seem valid. However, no sanctions have ever reached the level of utter domination that Israel has over Gaza, which has been described as “the world’s largest open-air prison”. The economic effects are devastating, far beyond any previous examples of sanctions. Gaza is effectively undergoing undevelopment, if I may use such an ugly neologism. Also, it’s not simply a matter of Israel choosing what to do with its own borders – if it were, the maritime blockade would not exist. Interestingly, the blockade of the coast does not just consist of stopping foreign ships arriving with potentially dangerous goods, but also the extraordinary restriction of Palestinian fishing boats from going more than three nautical miles from shore, instead of the previously agreed 20 nautical miles. Such a restriction has all the hallmarks of punitive, rather than preventative, action.

Alternative courses of action for Israel – that would be in keeping with their assertions of self-defense – are difficult to imagine. They are attacked regularly by Hamas and the various Palestinian resistance groups. Their citizens are killed and terrorised. It’s easy to see why they would seek to limit the ability of their enemy to attack them. The idea that they face an existential threat from Palestinians is laughable, but neither can they sit idly by and hope the rockets miss. Of course, “sit idly” is not what the status quo involves – rather, it is an active and aggressive occupation.

Despite all that, perpetual blockade is unsustainable. Though whether the so-called Freedom Flotilla is the harbinger of change is debatable. Most likely, they will simply be boarded and deported, the supplies distributed by the Israelis to the Gaza Strip, and victory claimed by both sides. Israel can’t be forced to let go of the Palestinians, and the terror tactics of Hamas and the rest will never beget a free Palestine. It’s as close to an insoluble problem as has ever existed in international relations, with all sides locked into patterns of behaviour that prevent the very result they crave. I do not envy the task facing the leaders and their successors.

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The importance of reading carefully

Today I was pleased to see someone responded to my response to a letter to the Sydney Morning Herald, even though they disagreed. Unfortunately, Siobhan Brahe didn’t actually rebut my statements, due to the fact that she apparently didn’t read my letter carefully, nor apparently has she read the study I refer to at all. Continue reading

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Power to the people

I watched a fascinating program on TV last night, a special episode called ‘The Human Power Station’ of BBC program Bang Goes the Theory . They asked a family of four to participate in an experiment, without telling them what it was, and got them to behave as they would normally on any given Sunday – lounge around at home mostly.

The experiment involved unhooking them from the electricity grid, and instead feeding power to the house by way of several dozen cyclists in a nearby warehouse, pedaling stationary bikes attached to dynamos. Cameras set up inside the house would track what the family was doing.

The stated purpose of the experiment was to see what typical power consumption equates to in human effort. The results were surprising to me, having not thought about the specifics much at all. They found each cyclist (club members, not your average Joes) could produce about 100 watts going at a steady clip, which meant they needed 15 to heat up the iron, 24 to run the oven, 20 for the kettle, 4 for the TV and Wii, 16 for the vacuum…. Then there was the tumble dryer, the coffee machine, the fridge, the lights, computers, and all the miscellaneous electrical devices found in your average Western home.

Of course the real purpose was to show how much power is simply wasted. There was a running commentary on how long the oven had been on without cooking anything, how the coffee machine was left on all day, how things weren’t turned off at the wall, etc. At one point the family went for a walk, so a presenter went in to check what had been left on, or on standby, and the amount of cycling needed just to keep things ticking over was quite substantial.

Now that’s all fine – it’s great to have our electricity use made tangible like that, and almost all of us can stand to use power more frugally. However, what really made an impression on me was how amazing and wonderful the increase in power consumption has been for improving human lives.

At the end of the show, another presenter showed what the equivalent energy would mean in fossil fuel terms – an amount of coal that would fit in a big shopping bag, or roughly three litres of oil. Scores of people, working non-stop all day on quite efficient devices, could barely muster the joules present in an armful of carbonised vegetable matter!

Imagine living in a time when human power was the main form of usable energy (in fact, in some places in the world, it still is!) – the sheer effort required to provide goods and services would mean you would have very few of either. This is called ‘poverty’. The enormous increase in energy – in productivity – that has been made available to us, or is inherent in our possessions, is why we live the good life now. All thanks to the processes that made that possible – capital accumulation, technological progress, and economic growth – and the system that gives us more of them than any other: capitalism.

As I said, this doesn’t preclude being more energy efficient – saving it in one place makes it available in another. There’s also the environmental consequences to consider. In my ideal world, we would consume truly vast amounts of energy, but without impacting on the world that sustains us. Some technologies offer promise in this respect, but they all look a long way off.

In the meantime, try this.

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Save the environment, give it a market price

An old insult directed against economists is a reprise of Oscar Wilde’s pithy putdown of cynics – they know the price of everything, and the value of nothing. Like so many glib one-liners, it is both manifestly unfair and hinting at a kernel of truth.

Prices are subjects that occupy a great deal of economists’ time, it is true, but that’s because they are the primary quantification of value in a market. What is the value of an apple to me? The highest price I would pay for one.

Markets don’t deal very well with things that have value, but no prices (it’s one of the reasons why I advocate a carbon tax, in order to put a price on polluting the atmosphere). Many environmental problems originate in this disconnect between value and price, which is why I’m very pleased to see a new study is out trying to quantify the benefits of biological diversity and the benefits that flow from that:

Setting up and running a comprehensive network of protected areas would cost $45 billion a year globally, according to one estimate, but the benefits of preserving the species richness within these zones would be worth $4-5 trillion a year.

The economy, both its market and hidden forms, rest on a natural foundation, and cannot exist without the ecological goods and services provided to us by nature. Destroying that foundation would sign our death warrant, and although we’re a long way from that scenario, we have been plundering natural capital in an unsustainable manner.

Greenies would conclude that we should outlaw destructive practices, and for a few things that is feasible. It’s not something we can accomplish in its entirety, however, without wreaking enormous damage on our society. So why not use what we have at our disposal? A magnificent system for evaluating value and allocating and preserving resources – the market. As long as we give it something to work with, that is – prices.

Forests, or whatever natural resource you care to name, have tremendous value on all sorts of levels. But unless that value can be compared with other things we value, through prices, people won’t make decisions that reflect its true value. For instance:

  • The subsistence farmer wants to feed his family, and without a way of showing him that we value the forest he wants to slash and burn more than what he can get out of doing so, nothing short of shackling him will stop its destruction.
  • The logging company wants to earn a profit, and without a way of showing it that it can earn more from the biodiversity, soil- and water-creating abilities, medicinal prospecting opportunities, etc, than what it can get out of cutting the forest down, even banning the practice will do little to stop it.

We should be bringing more of our world into the market system, not less. We should be harnessing market forces to preserve our environmental heritage, not demanding they leave it alone. We should be moving environmental assets to private ownership, not idly watching collective ownership destroy them.

UPDATE 28/5/10:

Today’s SMH had this example of a partial pricing of forests, though one dependent on philanthropy and therefore inadequate as a total solution:

INDONESIA’S President, Susilo Bambang Yudhoyono, has announced a two-year moratorium on new logging concessions, part of a deal with Norway in which Indonesia will receive up to $US1 billion ($1.2 billion) if it adheres to a letter of intent signed by the two countries yesterday.

The initiative was warmly welcomed by environmentalists. It will put curbs on Indonesian’s lucrative palm oil industry and could delay or slow plans for the creation of a huge agricultural estate in Papua province.

Addressing reporters on his way to Oslo, where the deal was signed, Dr Yudhoyono said Indonesia had to balance its needs for economic development with its responsibilities to prevent a rise in carbon emissions, which the majority of scientists say are responsible for global warming.

”Indonesia is really able to maintain its tropical forests, meaning that we maintain the lungs of the world,” Dr Yudhoyono said, according to the official Antara news agency.

”It is not merely Indonesia but also the rest of the world which will enjoy the fruit.”

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Taking the Laura Norder bus, last stop Dystopia

A worrying development in the United States – the Katie Sepich Enhanced DNA Collection Act of 2010 was approved by the House of Representatives. It gives money to states if they abide by certain rules, which would require anyone arrested (note – not convicted, just arrested) for certain serious crimes[1] to give a DNA sample that will go into the FBI’s Convicted Offender DNA Index System database for possible matches.

This is another facet of the “policy ratchet” as it applies to civil liberties that was raised by Professor John Quiggin at his blog, though in a different area.

In 2000, the US passed a law to extract DNA samples from everyone in jail or on probation for serious crimes. The idea was that there was lots of ‘orphan’ DNA evidence, and since these people had shown a predilection for crime already, they might have been guilty of the unsolved cases, so why not see if they matched. It was challenged, but upheld by the courts.

Next, in 2006 a new law allowed federal agencies to collect DNA from anyone they arrest (about 130,000 people a year). Now the policy ratchet has taken another turn, and state and local authorities can get into the action, helped by the funding the Act provides.

Some argue that it will help convict criminals, and I have no doubt it will. I also give little credence to the paranoid who fear the potential abuse such a database could allow. My objections are more abstract:

  • This law is indicative of the trend away from the presumption of innocence. Convictions are hard to get because our system is biased towards preventing the innocent being punished, even at the expense of letting the guilty go free. So chipping away at the protections, like America’s rapidly disappearing freedom from unreasonable search, is moving towards a world where innocence rather than guilt must be proved.
  • This law points to the next, most disturbing, likely turn of the ratchet. People who are arrested are not guilty of anything until convicted – that is, suspicion on the part of the police is all that distinguishes them from other citizens. The next step is to simply have the DNA of everyone in the country available to law enforcement. Is that really where the US wants to go?
  • The history of the evolving uses of databases like this suggests that whatever restrictions on its use are in place originally, there is a great capacity for later governments to change it, in line with the policy ratchet effect. I’m not worried, like some tinfoil-hatters, about DNA being planted at crime scenes. I’m worried about the collation by governments of information on their citizens, and what they’ll do with it in the future.

1.- Burglary or attempted burglary; aggravated assault; murder or attempted murder; manslaughter; sex acts that can be punished by imprisonment for more than one year; and sex offences against minors.

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One’s sexuality is no-one else’s business

Ex-minister for Transport David Campbell was not my favourite person. How could he be, being partly responsible for NSW’s dismal record on public transport? If I had a vote in his electorate, I would try to get rid of him – though without much hope of Labor replacing him with anyone better.

However, his resignation from Cabinet was not right. It had nothing to do with government car use, or hypocrisy over morals. It was the realpolitik realisation that a married man going to a gay club was a political liability. And that’s a sad indictment of the state of our society – or at least his fellow politicians’ assessment of it.

Mr Campbell, I’m sorry it happened this way, and I admire your fortitude when facing the media. I’m also sorry the Premier didn’t refuse your resignation and try to defend common decency forthrightly. What happens just between consenting adults is not something requiring public inspection, no matter who you are.

UPDATE 30/5/2010

David Laws of the UK Liberal Democrats has just resigned as finance minister. He too was trying to keep his sexuality secret (his words, not mine), but in contrast to David Campbell, he was breaching his public duties in doing so by channelling money to his partner.

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Progress at last

Verity Firth, Member for Balmain, kindly sent me a link to the recently completed feasibility study for the Inner West light rail extension from Lindfield to Dulwich Hill, prepared by GHD. Regular readers will know what a big deal this is for me – I’ve been an outspoken advocate for light rail for years. Sydney should never have ripped up the tram lines in the first place, so any movement towards returning to this excellent mode of transport is to be commended, no matter how small.

The study concludes that construction definitely should go ahead for an extension to Lewisham (intesecting the Inner West rail line), and should probably go ahead for an extension to Dulwich Hill (intersecting the Bankstown line), with NPVs of $25.2 million and $1.5 million respectively, over 30 years, and benefit-cost ratios of 1.6 and 1.0. However, since this is just a preliminary study, they did not consider the wider economic benefits that could arise from second-order effects, so those figures should be considered a minimum.

The results are not surprising. Because the project takes advantage of an unused freight line, construction costs are comparatively negligible – GHD predict $72.5 million for the full length, including cautious estimates for upgrading infrastructure, and ~$6 million every four years in upkeep. Interestingly, the largest item in construction is ‘Contingency’, with $24.2 million, a full third of the cost. This correlates very well with lobby group Ecotransit’s estimate of ~$50 million, if you ignore the very large contingency allowance.

There is not much controversy about stop locations, with only a few (Norton St, Marion St, and the Lewisham and Dulwich Hill interchanges) having two or more feasible options. Generally these are choices between better integration with bus routes and the railway stations, or easier construction. I would argue that integration should win out every time – successful public transport rests on several conceptual pillars, and ease of use/transfer is a primary one. Saving a couple of million but making the service less attractive appears penny-wise, pound-foolish.

A secondary concern is the proposed GreenWay – a flora/fauna corridor, bike/foot path combo running roughly alongside the rail line. Several options are considered, though not in exhaustive detail, and GHD plumps for the route designated ‘Orange’, a route mostly outside the rail corridor proper that could incorporate existing shared paths. Personally, I think the GreenWay concept has merit, but shouldn’t be allowed to interfere with the light rail which, after all, is the main objective. For  example, the study suggests certain options would reduce the line to just one track in some spots, something that should be avoided. Thankfully, the parameters of the study concur with my preference, so it shouldn’t be a problem unless Greens (heavily represented in Leichhardt and Marrickville councils) kick up a stink about not enough trees or something.

I urge everyone affected by traffic congestion, or frustrated with the lack of north-south transport links, or concerned with rational decision-making by government, to read the study and send your feedback to lightrail@transport.nsw.gov.au. I certainly will, and I can’t wait for the next study on a CBD extension (which, arguably, is more important though considerably more complicated).

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Just say no… to the war on drugs

What would you do with $1 trillion? Don’t answer too quickly, lean back and think about it for a while.

Physically, using the highest-value banknote I know of (the €500 bill that will be excluded in Britain due to its use by criminals for laundering and smuggling cash), that’s 2,200,000 kilograms of cash. You can’t fit that into a wallet. In fact, you would need a crane about this size to lift it:

Continue reading

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Trams, trains and automobiles

Contrary to my pessimistic prediction, it looks more and more likely that the NSW government will drop the CBD Metro, or at least change it for the better.

First there were repeated confirmations that the project would proceed. Then Premier Keneally said the plans weren’t finalised. Later, they stopped the compulsory acquisition of properties in Rozelle, hinting that the terminus there would not be built. In the process they angered Balmain Tigers Leagues Club, who had been told they’d have to vacate their premises for five years, and went ahead with the enormous expense and extensive preparations to move. Now the State government is creaking under the combined pressure from residents, the Opposition, and most recently the release of a definitive transport report commissioned by Fairfax Media and written by independent experts.

I can only hope that Labor listens to the cries of the voters and exhortations of the engineers. I’m not popping champagne corks yet, but the events of the past nine months have given me hope.

There is something I’d like to add to this discussion.
Continue reading

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I’m no Lord Kelvin, but I try

A long time ago I read a thoughtful critique on orthodox economics, and while I can’t do justice to the argument presented by the author (I can’t even remember who the author is!), what stuck with me was a line that criticised the tendency of policy makers (encouraged by economic advisers) to assume that certain economic phenomena were akin to physical laws in their inevitability, ubiquity, or predictability. As the years went past, I discovered that this is a common strand in arguments about economics, and while I feel it is often over-stated, there is plenty of truth in the general gist. Even the most sophisticated of economic models have to simplify many processes. This is inescapable, since to model something completely accurately would involve replicating it in full, which would be redundant and tell you nothing.

Economics is at the intersection of natural sciences and philosophy. If you spot a trend in some economic variable, because the subject matter is human interaction, there are innumerable unseen (and possibly unexaminable) factors driving it. You can make plausible ex post stories about events, but the nature of the problem means there can be several mutually contradictory stories, and each implies a different progression into the future. Economics is also not amenable to reductionism, unlike physics, because at every step one is faced with chicken-and-egg problems, circular and cumulative causation, positive and negative feedback loops of indeterminate force and scope. Then there’s the reliance on proxies, and proxies of proxies, that is made necessary by our inability to gather the requisite data (which is mostly inside people’s heads, and not even accessible in a neutral scientific manner by those people themselves).

At first glance, it doesn’t appear possible for economics to converge on the ‘right’ answer/explanation in the same way as the natural sciences seek to do.

And yet, we do see trends. We do see recurring patterns. There is a form of order, some givens. To borrow from physics terminology, there are boundary conditions.

Frustrated by the subjective nature of many socio-economic epistemology arguments, I have been slowly trying to informally assemble a list of these economic boundary conditions that all could agree on as indisputable. At least then we could have a common base that could anchor these discussions. The list isn’t long, and is very much a work in progress, so I welcome any constructive criticism, and particularly suggestions for additions or deletions.


Nothing is infinite. There is only so much to go around. (This is conceptually related, economically speaking, to the observation that human wants are effectively without end, which I believe there is good evidence for, but don’t think it is iron-clad enough to belong on this list.)


There Ain’t No Such Thing As A Free Lunch. At the most basic level, any action consumes energy (well, it’s actually a conversion of energy that increases entropy, ie less usable energy, but for our purposes this will suffice) and time. Nothing is gained without the use of resources, no matter how hidden from view that usage is.

Opportunity cost

Quantum physics aside, it is impossible to do two things at once. Therefore there is always an opportunity cost to any action, at the very least in terms of energy and time.

Comparative advantage

Everyone has a different comparative advantage in production, because everyone has different skills and different levels of skill, and therefore different opportunity costs. Even for two or more people who are precisely identical in every single way, they still have to occupy different points in space, and so will have a different comparative advantage in producing goods and services (which after all have to go somewhere else to become commodities).

I think more entries belong on this list, but I am still pondering them. Candidates include the non-perfectibility of human systems, the limitations on information gathering and processing, stuff like that. There are many concepts that approximate the kind of certainty I’m aiming for, such as diminishing marginal utility, but I want to be strict about only accepting ones that no-one can disagree with under any circumstances. I’m wary of including things claimed as immutable ‘human nature’ – even though I believe there are strong currents in human behaviour that are linked to our genes – because there is too much variation to account for. I will still argue for public policy to take these currents into account, because we should structure society around the majority.

My purpose here is to establish certain Laws of Economics as on par with (and connected to) physical laws like the Laws of Thermodynamics. Luckily, despite the caricature of economics as “the dismal science”, these economic laws can generate a happier ending than those of thermodynamics, which are encapsulated in the observations 1) You can’t win 2) You can’t break even 3) You can’t even get out of the game.


Some comments have led me to reflect on the article that galvanised me to put my amorphous thoughts on the subject down in black and white, The Expanding Domain of Economics by Jack Hirshleifer. This quote in particular is, I believe, most apt:

[I]t is ultimately impossible to carve off a distinct territory for economics, bordering upon but separated from other social disciplines. Economics interpenetrates them all, and is reciprocally penetrated by them. There is only one social science. What gives economics its imperialist invasive power is that our analytical categories – scarcity cost, preferences, opportunities, etc. – are truly universal in applicability. Even more important is our structured organization of these concepts into the distinct yet intertwined processes of optimization on the individual decision level and equilibrium on the social level of analysis. Thus economics really does constitute the universal grammar of social science. But there is a flip side to this. While scientific work in anthropology and sociology and political science and the like will become increasingly indistinguishable from economics, economists will reciprocally have to become aware of how constraining has been their tunnel vision about the nature of man and social interactions. Ultimately, good economics will also have to be good anthropology and sociology and political science and psychology.

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