Sunday, May 29, 2011

The elimination of the middle classes continues in the West

I see from the FT this morning that Heads of FTSE 100 companies took home median earnings of 32 per cent more last year, while workers suffered the most prolonged squeeze in real wages since the 1920s. For more details, CLICK Sphere: Related Content

Hope for those fed up with Spam

A single commercial spam campaign can generate as many as 3 messages for every person on Earth. And it takes 12.5 million spam e-mail messages to sell $100 worth of Viagra - according to research cited by The New York Times (click) though actually published some years ago by a team of computer scientists at two University of California campuses. Apparently, it was these scientists who coined the term, “spamalytics” to describe their study or analysis of spam.

So why does all this now suddenly represent hope against spam?

Not because the scientists are pinning their hope on spammers coming to see that spam is not a very efficient or effective way to sell stuff.

But because their most recent study of nearly a billion spam messages, and commitment of several thousand dollars on purchases from spammers, reveals that there is a “choke point” that can be used to throttle spam.

That “choke point” is money.

Apparently "95 percent of the credit card transactions for the spam-advertised drugs and herbal remedies" are handled by just three financial companies — one based in Azerbaijan, one in Denmark and one in Nevis (West Indies).

Many of us have discovered that there is no technology solution that really works against spam, in spite of Bill Gates himself having assured us many years ago that technology solutions would be quickly found against spam.

We can also now be sure that there is no market solution to the problem of spam.

As in so many other matters, there are only two solutions:

1. voluntary action on the part of Visa/ Mastercard/ other credit cards companies/ financial institutions such as the ones in Azerbaijan, Denmark and St Nevis, OR

2. legislation and/or regulation.

So if you are fed up with spam:
(a) write to your credit card company asking why it does not act to choke spam, given the research;
(b) write to your MP, asking her/him to initiate suitable legislation;
(c) write to the relevant regulatory body or bodies in your country, asking them to introduce suitable regulation

Thursday, May 26, 2011

Interested in the current state of the global civil war?

Then read, in today's FT, the piece titled: "Basel III break for banks in EU". Apparently the draft agreement offers an insurance loophole that ‘violates the global pact’
Read more >> Sphere: Related Content

Tuesday, May 17, 2011

More interesting but useless research from an economist

A researcher at Florida Gulf Coast University demonstrates that in deeply corrupt countries such as Congo, incidences of corrupt practices actually enhance economic growth. In his view, this may be because it helps companies sidestep onerous rules.

Actually in "deeply corrupt countries" too-onerous rules as well as whimsical administrations exist precisely to make it necessary to bribe before anything, legal or illegal can be done (actually, there may be very little that is "legal").

So, in such countries, there is NO other way of doing business than by bribery et al.

Since growth is the byproduct of economic activity, naturally there would be NO growth if no one paid any bribes and no business got done.

The researcher has, however, a category of "less extreme corruptness", which he calls "average endemic corruption". In such countries, by his calculation, a one-standard-deviation increase in corrupt incidences depresses per-capita GDP growth by 0.12 percentage points.

The conclusion to be reached from his research appears to be, on the face of it, that if you want to be corrupt and to have economic growth at the same time, it is better to be extremely corrupt than to be averagely corrupt.

That is of course nonsense. The level of growth in a "deeply corrupt" country is very much lower than in an "averagely corrupt" country. In other words, the degree of lack of growth of a country is directly linked to how corrupt it is.

That startling fact does not need research.

In fact a lot of research nowadays tends to labour the obvious.

Which is what is bound to happen when university professors are rated by university administrations 80% on how much they publish, and only 20% on how well they teach as well as on how much else they do (e.g. organise academic conferences).

This philosophy of university administrations results in what is called the "publish or perish" syndrome. That produces a lot of publications, but because the "quality" of the research is assessed on technical criteria, you get a lot of "top quality" research which adds very little to the sum of non-obvious or useful human knowledge. Sphere: Related Content

Monday, May 16, 2011

Why did the West rise, and why is it falling?

I am delighted to hold in my hand a copy of a book that was sent to me for pre-publication review: Dr Vishal Mangalwadi's THE BOOK THAT MADE YOUR WORLD (just published by Thomas Nelson, USA).

From childhood, I have wondered what made the West so rich and influential.

Having investigated this in a disorganised way over several decades, I am stunned by Dr Mangalwadi's systematic, clear, and easily-understandable explanation.

Every person who wants to understand the modern world must read this book - though I disagree profoundly with some of the details of what he writes.

The book goes beyond the usual and totally unsatisfactory explanations of accident, "muggins' turn", fate, weather, geography, guns, steel, and rationality.

THE BOOK THAT MADE YOUR WORLD explains not only what made the West great, but also why it is failing.

Reading this volume will also, by implication, clarify what needs to be done to steer globalisation away from its current volatility, vulnerability and unfairness.

If you wish to help build an environmentally-responsible, stable, prosperous, and humane world, then this book is essential reading. Sphere: Related Content

Thursday, May 12, 2011

The limits of mainstream economics

Last week, I was at a lecture by one of the top economists in Germany, whose presentation was completely demolished by the first participant from the floor, who said that he was amazed that the entire presentation had nothing on the shadow financial system which is many times the size of the economy as described in the presentation; and that, if the shadow economy had been taken into account, none of the presentation's conclusions stand.

Interestingly, the presenter had absolutely nothing to say in relation to the participant's statement, beyond small-facedly conceding.

Raghuram Rajan is one of the top economists in the USA, famous for his book, “Fault Lines: How Hidden Fractures Still Threaten the World Economy” - which, you might imagine, has more to say on the subject.

Instead, he focuses on what he sees as the three big challenges that led to the economic crisis and still threaten the health of the global economy:

1. credit creation outpacing the American population's income growth,

2. the commitments to building up external savings with exports by many emerging markets, and

3. the fragility associated with the resulting large capital flows.

Again, nothing on the shadow financial system and its pro-cyclicality.

I haven't heard a top economist from India or another developing country in the last week, but I would guess that the situation is no better there.

Till mainstream economists learn to take the shadow financial system into our discipline, mainstream economics will continue to be irrelevant to real life. Sphere: Related Content

Thursday, May 05, 2011

Something objective on Bin Ladin and the Al Qaeda

There have been numerous appreciative comments (for which many thinks to everyone!) on my post regarding Bin Ladin

However, several have asked whether I might reflect more objectively or at least less personally on the future of the Al Qaeda

Well, the first thing I should say is that I know nothing about Al Qaeda and Bin Ladin beyond what I have read in the newspapers (I am not much of a TV man, and prefer radio if I have to have some broadcast medium).

Having shared that caveat, I should say that anyone who shares three characteristics is bound to be a leader, in any country and in relation to any cause: (a) gives away his money, (b) lives a simple lifestyle, and (c) is a good public speaker.

Bin Ladin qualified on all three grounds, I think, though I have no means myself of judging how good a speaker he was, as Arabic is not one of my languages.

Being a leader is naturally a different matter from being a competent leader - and that is a much more difficult matter to judge, because competence in leadership derives from a rather more complex mix of factors.

So, what does the death of Bin Ladin mean for Al Qaeda and related movements?

There has been a general decline in their appeal over the last few years, and Bin Ladin's death could strengthen that tendency.

But Bin Ladin's death could, instead, reverse that tendency, depending on who steps in to lead the movement. If it is really someone like Awlaki, who is reputed to be the brain behind the most damaging attacks staged by Al Qaeda, then there are the following considerations:

a. Bin Ladin was Saudi, Awlaki is Yemeni - and Yemen is not Saudi Arabia.

b. Bin Ladin came from an extremely rich family and gave away his wealth. Not the case with Awlaki (so far as I know)

c. No idea about Awlaki's lifestyle, but that is just evidence that he is not known for it.

d. What he is known for is his apparently "intellectual" sermons. Assuming they are as effective as is claimed, Awlaki's legacy will depend on how he is able to leverage this single source of appeal.

Naturally, if he is able to recruit lots of people and then guide them into successful actions, it is possible that he might eventually come to rival Bin Ladin in reputation.

But I hope that will not be the case, given the general Arab turn away from this sort of nonsense as that only ends up bringing disrepute to Islam. Sphere: Related Content

Tuesday, May 03, 2011

Osama Bin Laden

As you can imagine, I had and still have very mixed thoughts and feelings on hearing the news of the killing of Bin Laden

You may know that my sister was killed because she happened to be in the wrong place at the wrong time (the US Embassy at the time it was bombed by one of Bin Laden's followers)

I might be expected to feel at least some sense of satisfaction or relief or something like that - but I don't.

Trying to analyse why, I have the following reflections:

1. My master told me to love my enemies, not kill them. That has implications for what I am to do and feel if someone who is only indirectly my enemy is killed by some other party unrelated to me. Of course "everyone who takes the sword will also die by the sword". So it was probably inevitable that Bin Laden would go in some manner like this, but I regret very much the fact that he was killed by US forces in this particular way.

2. As I understand it, under US law, a "wanted" person, after arrest, is supposed to be tried in court before judgment is passed and the person is released or sent to prison or execution, depending on the evidence: how come there was no trial in Bin Laden's case?

3. The hyping of terrorism has become a means of devaluing, degrading, eroding and reducing civil liberties - isn't it time now to re-examine the whole business of how governments and media have been handling the question of terrorism? Terrorism has a terrible impact on a few, but the state of civil liberties is gradually becoming insufferable for everyone.

4. Terrorism can only be confronted by addressing its root causes in Koranic teaching/ propaganda which has emanated from Saudi Arabia over decades, and which the West has tolerated in exchange for geo-political arrangements which enable oil to flow from Saudi Arabia to the West. In other words, the West's enjoyment of its standard of living is, at present, inextricably linked with its allowance of the sort of propaganda/ teaching which has led, and still leads, to terrorism. That devilish bargain needs to be modified so that we oppose the lack of intellectual and spiritual freedom in Saudi Arabia, Pakistan and other such countries, which should told clearly that that kind of Islamism, terrorism and Sharia law has no place in civilised societies. Moreover, that any country that practices Sharia law will not be traded with nor supported in any way. Countries that practice Sharia law should be regarded as pariahs, and their leaders regarded as criminals under international law.

5. Now that the people of the Middle East are themselves rejecting their regimes, or at least requiring them to change in line with the values of liberty and equality if not fraternity, perhaps we will see people from the Middle East and other parts of the world opposing more vigorously the interpretation of the Koran that leads to terrorism and Shariah law.

6. Democratic regimes in the Middle East may well be more Muslim than the current tyrannical regimes. But democratic regimes, however Muslim, will eventually learn that Islamism leads only to cultural decline, and that openness and liberty are the only values that lead to continued development, while equality and fraternity are the only bases on which a globalising civilisation can continue to be built.

7. The passing of Bin Laden can be the end of an era - or it can mean merely a continuance of the sort of unsatisfactory disorder that we have at present. Which way things go will depend on which choices we make. Clarity about the values for which we stand is more necessary now than ever before. Sphere: Related Content

Retirement presents

At my retirement party yesterday, some of the participants very kindly gave me some presents.

I found the presents fascinating, in terms of what the generous folk thought I might need or like.

Among the presents were:
- wine (I don’t usually imbibe, but I can always find good uses for it!),
- chocolate (great, but not as yummy as Indian sweets!),
- a bottle of jam made of fruit found only in Brazil (most interesting!),
- a CD of music by Bryn Hawroth and another by Barry Maguire (both favourites),
- a fairy figure (must investigate what this is or is supposed to symbolize or do),
- a copy of his book by the author himself (autographed, lovely!),
- a comic novel, and a thriller in English.

The last two, presumably, because, in retirement, I am going to lack both fun and thrills. Sphere: Related Content