Almost half a million Sri Lankans work making clothes. In January, 23 million pairs of gloves, 25 million pieces of ladies’ underwear, nine million T-shirts and a million suits left the port of Colombo for the United States. Sticking with the island despite the December tsunami (which spared inland garment factories, and did only minor damage to the Colombo port), as well as competitive pressures from India and China, the buyers paid Sri Lanka $198 million for the clothes. Then they paid $26 million in tariffs to the U.S. Customs Bureau. The tariff is the equivalent of a tax of 13 cents on the dollar. In the same month, 4,000 cars and nearly a million gallons of vodka arrived from Sweden in America’s Atlantic ports. Twelve thousand cell-phones and 10,000 cubic meters of wood from Finland joined them. So did two million kilos of cod, turbot, and other fish from Iceland; 200,000 kilos of crab and salmon from Greenland and the Faeroes; hundreds of thousands of barrels of North Sea crude from Norway, along with 75 tons of smoked salmon and $4 million in turbojet parts. Denmark supplied, among other things, 667 tons of cheese for American tables and $65 million in insulin and blood sera for our hospitals and clinics. The value of the Scandinavian goods was just under $2 billion. Did the buyers of Absolut vodka, Nokia phones, lox, oil, and Volvos pay $260 million, as they would if they faced a tariff like that on Sri Lankan goods? No. They paid $15 million, or less than a penny per dollar. Why the disparity? The nine postwar international trade agreements have eliminated or deeply cut American tariffs on most types of goods. The Volvos, for example, get a 2.5 percent tariff. Nokia phones, Absolut vodka, Danish insulin, and Norwegian lox get no tariffs at all; neither do turbojets or fresh fish. The main exceptions, where tariffs have been left high, are clothes, shoes, and a few other household goods. (Cheese is also an exception. So are light pickup trucks.) Thus Sri Lanka’s top exports -- cotton pants, cotton shirts, and bras -- all have tariffs between 16 percent and 20 percent. Special low-income preference programs excuse most of Latin America and Africa from these taxes. Asia’s low-income countries -- Sri Lanka, Bangladesh, Cambodia, Nepal, Mongolia, and others -- have no similar program.

The point I would make is that anyone, no matter how well meaning, who publishes a piece of work which suggests that the aid we give to the Third World doesn’t do all that much good, is quickly going to find himself with a lot of new friends. And that, while I take your points about the value of negative critique, there is a duty on anyone who is presenting a piece of work which he knows to be quite politically convenient to nasty people, to be very suspicious indeed about his new friends, to be very cautious about accepting money from them and to be very wary of having words put into his mouth. I’m not sure that Easterly’s always been as circumspect as he might have been in this way (and independently, I think he has on a couple of occasions been really quite selective in cherry-picking examples to support various theses about those awful corrupt Third World political classes).

I hope we are not on a slippery slope here. Of course accepting money from new nasty friends could be wrong, but we must also be very carefull not to fall in the trap of self-sensorship. It would be equally wrong not to defend an argument, especially when you believe it to be true, because that will give you lot’s of unwanted friends.

Daniel: You admonish Easterly “to be very suspicious indeed about his new friends, to be very cautious about accepting money from them and to be very wary of having words put into his mouth” and suggest that “I’m not sure that Easterly’s always been as circumspect as he might have been in this way” -any evidence to support that? Are MIT (his publisher) or the Center for Global Development or the New York University (his employers) Republican fronts? Has he been paid off by the Heritage Foundation to fix the results of his regressions?

In the ongoing exploration of what DNA reveals about the origin of life, some anti-establishment scientists are abandoning naturalistic explanations for the origin of genetic information and looking to theories of design for answers. In almost every scientific discipline there is newly found evidence that supports the theory of intelligent design. A growing number of scientists around the world no longer believe that natural selection or chemistry, alone, can explain the origins of life. Instead, they think that the microscopic world of the cell provides evidence of purpose and design in nature – a theory based upon compelling biochemical evidence. Join us as Dr. Stephen C. Meyer, a key design theorist and philosopher of science, explains this powerful and controversial concept on the mysteries of life.

De voorzitter van de Europese Commissie, José Manuel Barroso, mag niet in een programma op de Franse televisie verschijnen. Een programma met Barroso zou onder druk van de Franse regering geannuleerd zijn. Het nieuws volgt op een nieuwe opiniepeiling die een Frans ’neen’ tegen de Europese grondwet voorspelt. France Télévisions, de groep die de openbare televisiezenders France 2, 3 en 5 bundelt, annuleert een programma met Barroso. Dat deelde een woordvoerder van France Télévisions gisteren mee. Het Franse weekblad L’Express meldt in zijn jongste editie dat de diensten van de Franse premier, Jean-Pierre Raffarin, druk uitoefenden op France Télévisions. Het geannuleerde programma had op donderdag 21 april op het scherm moeten verschijnen. Het was de bedoeling dat Barroso zich gedurende honderd minuten zou verdedigen tegen een panel van experts en journalisten. De Franse president, Jacques Chirac, zou woedend gereageerd hebben toeh hij hoorde van het geplande optreden van Barroso.

No sane person these days believes in the labour theory of value. Even John Roemer, an economist sympathetic to Marxism, has described it as “not a useful empirical theory.”

But there’s one place where this silly idea is still believed – in the Equal Pay Act, the law requiring that women get equal pay for work of equal value.

The Equal Opportunities Commission summarizes the law thus:

The EPA describes equal value in terms of the demands of jobs. It gives ‘effort skill and decision’ as examples of particular demands…What matters are the demands made on employees by their work, rather than the value of the work to the employer.

This is absurd. What matters to an employer is the value of that employee to him – or more precisely, her marginal product. Output matters, not inputs.

Think of it this way. A recurring, if under-emphasized, theme of studies of the labour market is that observable skills account for only a small proportion of the variation in wages. R-squareds on Mincer equations are often less than 25 per cent; see for example, this paper or this one. Many apparently identically qualified people have unequal wages.

How should we react to this?

The neoclassical economist says such differences reflect differences in unobservable skills, or other differences that yield different marginal products. From this perspective, the Equal Pay Act is just grossly inefficient managerialism. It’s the pretence that experts can second-guess markets.

However, you don’t have to believe this to believe the Equal Pay Act is silly. There are, at least, four problems with it.

1. It’s arbitrary. Let’s say differences in wages are due to luck. An unlucky woman then has a claim for compensation under the EPA, but an unlucky man doesn’t. I suspect this is the case for some of the high-profile cases brought by women in the City. Salaries there vary enormously from individual to individual, often without any obvious link to merit.

2. Women are not the only victims of discrimination. Wages differ according to height (pdf), looks and whether one has a tidy home. But the EPA doesn’t protect short ugly untidy people from discrimination.

3. The Act imposes a mindless equality. If a woman proves her work is more valuable than a man’s, she’s not entitled to higher pay than him. The EOC says: “Tribunals cannot award higher pay for work of greater value.”

4. The Act doesn’t ask how discrimination is possible.

Consider a tribunal’s recent decision that nurses were discriminated against because they were paid less than medical technicians, despite having comparable skills. Why, if this is the case, would anyone want to become a nurse rather than a technician? It’s not as if the pay gap has only just emerged.

One obvious answer is that there are non-wage advantages to being a nurse. You get job satisfaction. You get respect; nurses used to be called angels, whereas lab technicians rarely are. And nurses can have lots of choice about the type of work they do and where they do it. These compensating advantages might explain the pay gap between nurses and technicians. In one sense, they must do so – why else would someone choose to train for a low-paid job when they could train for a higher-paid one?

Feminists might reply that women’s preference for lower-paid but more rewarding work is the result of women being indoctrinated into gender roles at a young age.

But is this really true? Lots of men have this preference – me, for one; I left the City to take a lower-paid but more rewarding job in journalism. And even if the feminists are right, so what? Are people really entitled to compensation because they would be unhappy if their preferences were different?

Feminists, of course, have another reply - that women are, obviously, paid less then men. But this alone is not proof of discrimination.

One of the best recent investigations of this question is this huge pdf, published by the EOC. It found that women who work full-time earn 18 per cent less than male full-timers.

However, much of this gap is due to factors other than discrimination. Men have more education than women (1.4 percentage points of the gap); they have more experience (3.5 percentage points); they work in larger firms; and so on.

The report found that only seven percentage points of the 18 per cent pay gap was a pure gender effect. But even this is not proof of discrimination. It might just reflect differences in preferences and motivation. It is, the authors say: “the upper limit on the component of gender discrimination that is direct discrimination.”

That said, there might also be indirect discrimination. Women who have dropped out of work to care for children subsequently have lower earnings, even controlling for the direct loss of work experience; there seems to be a wage penalty for childcare. But it’s easy to imagine that this penalty might be due to lower marginal products, rather than to employers’ ripping off women.

But let’s say I’m wrong here, and that women – and women alone – are systematically paid less than their marginal product.

If this is the case, it can only be the result of monopoly or monopsony power. In a textbook competitive market any employer who tried to pay a woman less than her marginal product would find her lured away to a higher-paying firm.

True systematic discrimination, therefore – as distinct from either justifiable or random wage differences – can only be due to market imperfections. As Gary Becker has said, competition is a friend of minorities.

In this sense, feminists should support a free market economy. So why don’t they?

the authors and enforcers of the new EU Constitution believe:

That "competition is not the most powerful mechanism for achieving freedom, democracy and efficiency, but rather an unfair and unproductive form of dumping."

That "intrusive regulation, ruling and intervening from above are necessary because market failure is more dangerous than government failure."

That "the premise that government is ultimately a benevolent force, obliged to guarantee equal outcomes by redistributing benefits and privileges between individuals and groups."

Canadian labor markets are highly unionized and government standards play a bigger role than in the United States. Unemployment benefits, social welfare programs, minimum wages, and public health care are more generous. Since health care is a particular worry, the comparative statistics are worth noting. The Canadian federal and provincial governments have provided universal health insurance since 1960. In the United States, governmentassured health insurance covers only 33 percent of the population, while private insurance brings the US total coverage up to 85 percent of the population. On the basis of these differences, some Canadians fear that economic pressures will threaten their public health system. These fears are overblown, as Canadians increasingly recognize. If the Canadian health system were more costly than the US health system, there would be reason to worry. However, the public system in Canada consumes 9.6 percent of GDP while the mixed public/private system in the US consumes 14.6 percent of GDP. In Canada, public health enables employers to avoid costly private systems. To the extent health costs figure in business location decisions, Canada is a cheaper place to do business. Furthermore, (...) total public spending on labor market programs is much higher (relative to GDP) in Canada than in the United States or Mexico. Canada’s large public deficit in the early 1990s (8 percent of GDP) prompted a political reaction that led to substantial cuts in social spending, health and education. By 2004, Canada featured one of the best public budget positions among developed countries (a general government surplus of 1.8 percent of GDP). Yet, the Canadian health system still provides universal coverage and despite budget cuts, real public spending per capita on health care in Canada rose 1.8 percent annually between 1990 and 2000. Changes in the social safety net will come about if Canadians lose faith in their system and turn to the US model. The opposite could also happen. In the larger scheme of things, deeper economic integration is a comparatively weak force. If economic integration determined the size of social safety nets, Nevada and California would have similar systems. So would Alberta and British Columbia. They do not. Increased economic integration with the United States does not force any country to adopt US-style social policies. Countries choose their own social cohesion programs and adjust their resources to the program and vice versa. Canadians can have as much welfare state as they are willing to pay for. Trade and financial globalization increase the resources available for safety net spending, if that’s what a country chooses.

Left-wingers think: "My goodness, how can so few have so much? They were lucky anyway. Let us raise marginal tax rates."

Randians think: "Hail the productive powers of capitalism!"

Rawlsians think: "They didn’t produce that wealth, we did."

Others think: "My goodness, Africa is screwed up."

The economist? The economist wonders why there is not more trade between the two groups...

What have the Queen of England, Prince Charles and Tate and Lyle, the sugar company, got in common? Answer: they have all been milking subsidies from Europe’s Common Agriculture policy. The Queen and Prince Charles received £1 million during the past two years but Tate and Lyle hit the jackpot – with receipts of £233m over the same period. It may have something to do with the 300% export subsidy that sugar attracts.

Instead of a politics-as-usual debate over a trivial 3.5% decrease in agricultural subsidies, policymakers should reconsider why the federal government subsidizes agriculture at all. It hurts the world’s poor, makes food prices higher for consumers in the U.S., and the benefits don’t accrue to small farmers. Of course politicians don’t debate ending farm subsidies because it would eliminate one type of "food"—the pork congress members get to dole out

3) Indonesia. Wolfowitz is extremely proud of his work in Indonesia and the Philippines. I got the distinct impression that he does not think this story has been told accurately—and he wishes that George P. Shultz had done more with the story in his memoir. He was constantly being warned, vis-à-vis Marcos, that the Reagan administration was doing to Marcos what Carter had done to the Shah and the results would be similar. He managed to convince everybody to do it anyway, with a happy result, he thinks.

4) Somalia. Wolfowitz is also proud of what “41` (Bush Sr., IJ) did in Somalia, as a purely humanitarian mission before it got screwed up later. That led me to ask about:

5) Liberia. Why, I asked him, didn’t the Bush administration act more precipitously in Liberia? It could have saved tens of thousands of lives and scored political points against people like me who have, to put it politely, a hard time taking the humanitarian arguments for the Iraq war seriously. Wolfowitz did not really disagree with this. He said he was glad he was able to get the administration to act when it did. He clearly wanted to leave the impression that he would have liked it to happen earlier -without explicitly criticizing his own administration for not having done it. He spoke of the logistical difficulties of finding the necessary troops and of what happens after you get rid of the bad guys. (Hmmmm)

6) The Sudan. Wolfowitz also clearly indicated that he would like to see something happen to save the people who are still savable in Dafur, etc. Again, he said nothing clearly quotable on this point; but it was my clear understanding of the way he put things that he wanted to leave this impression as well.

He has long had a close relationship with centrist democrats in the Philippines, Malaysia, and Indonesia, and though centrist democrats might not sound very exciting, they are an improvement on the democratic centralists of Tiananmen Square (loved by the Kissinger crowd) or the pseudo-democrats such as Ferdinand Marcos or Gen. Suharto, favored by the more Cold War neocons. Wolfowitz was one of the first to go ashore in the tsunami relief operation mounted by the U.S. Navy, an operation widely and rightly accounted a major success. He prizes his Asian contacts and the relationship with moderate Islam that they symbolize.

On the excruciating question of Israel/Palestine, Wolfowitz is not at all the "Likud" fan that his defamers portray. He almost went out of his way to be jeered and hooted at a pro-Israel rally in Washington in the early days of the Bush administration, by telling the gung-ho crowd not to forget the suffering of the Palestinians. He has spoken quite clearly of linkage between the demolition of Arab rejectionism and the demolition of Jewish settlements. I can’t exactly say that I know the man, but on the occasions that I have met him I have been very struck by the difference between his manner and the amazing volleys of obloquy and abuse that have been flung at him.

when I started this blog, I chose the name without too much deep reflection. But I know what I had in mind. "Neocon" is usually used as a pejorative, unfortunately, and I wanted to try to rescue it from this fate and wear it proudly (although somewhat tongue-in-cheek). When I was a liberal and liberals were under attack, I used to say that I didn’t understand what all the fuss was about. Of course, now I understand a lot better, since I’m making some of that fuss myself. I think I always was more of a classic liberal (as in "social liberal or mild libertarian") than a leftist-type liberal (as in "thinking the US is a force for capitalist global imperialist evil"). I used to say to critics that I was proud to call myself a liberal. Now I’m doing essentially the same thing regarding being a neocon. "Neocon" is used by critics as a code word for a lot of things, among them: imperialist, unrealistic dreamer, and scheming puppeteer (along with its subset, scheming evil Jewish puppeteer). I am not using it in any of these senses. I am using it to mean a person, socially liberal, who espouses a foreign policy that includes the vigorous support of the spread of democracy and freedom around the world. Neocons usually believe that such a spread of democracy would be both a good thing in and of itself, and a practical thing as well, since the belief is that it will lead to greater peace and prosperity for everyone, including the US. The "neo" in "neocon" traditionally also refers to the fact that the originators of this position came mostly from the ranks of liberals or even leftists. Although it’s not always used this way any more, it is another way in which the word seems to apply pretty well to me. And since my political change has been relatively recent, I thought the extra "neo" would be particularly appropriate.

alle diensten, van post, over openbaar vervoer, tot bouwen en arbeidsbemiddeling zou liberaliseren. De vrije markt zou vrij spel kennen: wie het goedkoopste produceert, wie aan de laagste lonen werkt, wint.

Artikel 17
Algemene afwijkingen van het oorsprongslandbeginsel
Artikel 16 is niet van toepassing op:
1) postdiensten als bedoeld in artikel 2, punt 1, van Richtlijn 97/67/EG van het Europees Parlement en de Raad36;
2) de distributie van elektriciteit als bedoeld in artikel 2, punt 5, van Richtlijn 2003/54/EG van het Europees Parlement en de Raad37;
3) de distributie van aardgas als bedoeld in artikel 2, punt 5, van Richtlijn 2003/55/EG van het Europees Parlement en de Raad38;
4) de distributie van water;
5) aspecten die zijn geregeld bij Richtlijn 96/71/EG;
6) aspecten die zijn geregeld bij Richtlijn 95/46/EG van het Europees Parlement en de Raad39;
7) aspecten die zijn geregeld bij Richtlijn 77/249/EEG van de Raad40;
8) het bepaalde in artikel […] van Richtlijn …./../EG van het Europees Parlement en de Raad [betreffende de erkenning van beroepskwalificaties];
9) de bepalingen van Verordening (EEG) nr. 1408/71 betreffende het toepasselijke recht;
10) de bepalingen van Richtlijn …./../EG van het Europees Parlement en de Raad [betreffende het recht van de burgers van de Unie en hun familieleden om zich vrij op het grondgebied van de lidstaten te verplaatsen en er vrij te verblijven en tot wijziging van Verordening (EEG) nr. 1612/68 en tot intrekking van de Richtlijnen 64/221/EEG, 68/360/EEG, 72/194/EEG, 73/148/EEG, 75/34/EEG, 75/35/EEG, 90/364/EEG, 90/365/EEG en 93/96/EEG], waarin de administratieve formaliteiten zijn vastgesteld welke door de begunstigden moeten worden vervuld bij de bevoegde instanties van de gastlanden;
11) de door de lidstaat van terbeschikkingstelling overeenkomstig de voorwaarden van artikel 25, lid 2, opgelegde verplichting voor onderdanen van derde landen een bezoekersvisum aan te vragen, wanneer zij ter beschikking worden gesteld;
12) het vergunningstelsel als bedoeld in de artikelen 3 en 4 van Verordening (EEG) nr. 259/93 van de Raad 41;
13) de auteursrechten, naburige rechten en rechten bedoeld in Richtlijn 87/54/EEG van de Raad42 en Richtlijn 96/9/EG van het Europees Parlement en de Raad43, alsmede de industriële-eigendomsrechten;
14) handelingen waarvoor de wet de tussenkomst van een notaris voorschrijft;
15) wettelijke accountantscontroles;
16) diensten die in de lidstaat waarnaar de dienstverrichter zich verplaatst om zijn dienst te verrichten, onder een volledig verbod vallen dat gerechtvaardigd is om redenen van openbare orde, openbare veiligheid of volksgezondheid;
17) specifieke eisen van de lidstaat waarnaar de dienstverrichter zich verplaatst, die eigen zijn aan de bijzondere kenmerken van de plaats waar de dienst wordt verricht en waarvan de inachtneming onmisbaar is voor de handhaving van de openbare orde, de openbare veiligheid, de volksgezondheid of de bescherming van het milieu te garanderen;
18) het stelsel van toestemming met het oog op de vergoeding van de kosten voor intramurale zorg;
19) de inschrijving van voertuigen die in een andere lidstaat worden geleast;
20) de vrijheid van de partijen om het op hun contract toepasselijke recht te kiezen;
21) consumentenovereenkomsten betreffende de verrichting van een dienst, voor zover de toepasselijke bepalingen niet volledig op communautair niveau zijn geharmoniseerd;
22) de formele geldigheid van contracten waarbij rechten op onroerende zaken ontstaan of worden overgedragen, wanneer op deze contracten volgens het recht van de lidstaat waar de onroerende zaak is gelegen verplichte vormvereisten van toepassing zijn;
23) de niet-contractuele aansprakelijkheid van de dienstverrichter bij ongevallen in het kader van zijn activiteit jegens een persoon in de lidstaat waarnaar de dienstverrichter zich verplaatst.

Ik krijg een heel slecht gevoel bij het huidige nieuws en duiding, als ik zie hoe iemand als Bush in onze media voorgesteld wordt als een verspreider van democratie, terwijl hij naar mijn bescheiden mening een regelrechte fascist is die de wereld op de knieën dwingt.

Cuban President Fidel Castro has criticized Forbes magazine for the "infamy" of listing him among the world’s richest people, with a net worth of $550 million. "Once again, they have committed the infamy of speaking about Castro’s fortune, placing me almost above the queen of England," Castro said in a speech to top officials of Cuba’s ruling Communist Party, military and police. (...) On Tuesday Forbes published a story on the fortunes of the world’s richest rulers and heads of state, including Castro, Britain’s Queen Elizabeth and the Sultan of Brunei, saying none were "exemplars of capitalism" and did not qualify for the world billionaires list.

Proponents of capitalism often seem to go against common sense. They maintain that left entirely to their own devices, profit-maximizing businesses will charge reasonable prices to consumers, maintain product quality, pay workers according to their productivity, and constantly strive to do even better. But if business only cares about the bottom line, why not charge consumers exorbitant prices for junk, and pay all workers their bare subsistence? The answer is competition. A business that gives consumers a bad deal soon has no consumers left. They take their patronage elsewhere. An employer who pays productive workers less than they are worth faces the same dilemma. A rival employer will "steal" these workers by offering them a raise. Why bother to maintain product quality? Because cutting corners is penny-wise, pound-foolish: You save on production costs, but sacrifice your firm’s reputation. Once you look at the economy through the lens of competition, the whole picture changes. To the untrained eye, greedy businesses "take advantage" of consumers and workers. Due to competition, however, the road to profit is lined with good intentions: To succeed, you must give your customers and employees a better deal than anyone else. It is easiest to see the impact of competition in markets with thousands of small firms. Economists call this "perfect competition." The wheat market is a classic example. If one farmer charged more than the prevailing price, all his customers would switch to one of the thousands of alternative suppliers. Under perfect competition, firms produce until the product price equals the marginal cost of production. Moreover, competition ensures that firms produce at the minimum average cost. Any firm with higher costs will be undercut. It is an elementary economic theorem that perfect competition’s triple equality of price, marginal cost, and average cost maximizes society’s gains to trade; it is, in economists’ jargon, "fully efficient." This conclusion is easily misinterpreted. It does not mean that only perfect competition is fully efficient. Perfect competition is a sufficient condition for efficiency, not a necessary one. It is important to bear this in mind because in most industries, perfect competition will not naturally arise, and would be disastrous to impose. Perfect competition normally exists only if the minimum efficient scale - the smallest quantity a firm can produce at the minimum average cost - is small relative to industry demand. (Figure 1) If minimum efficient scale is large relative to industry demand, in contrast, only a few firms can survive; a small firm would have enormous average costs and be undercut by larger rivals. (Figure 2) Fortunately, is entirely possible for market performance to be as good with few firms as with many. Indeed, two genuine competitors may be enough. Imagine that two firms with identical and constant marginal costs supply the same product. The firm with the lower price wins the whole market; if they offer the same price, each gets half. Competition still induces each firm to price at marginal cost. Why? If the firms initially ask for $1.00 above marginal cost, each firm could steal all of its competitor’s business by cutting its price by one penny. Like an auction, price-slashing continues until price and marginal cost are equal. What if the minimum efficient scale is so large that only one firm can survive? Surely competition breaks down? Not necessarily. As long as there is potential competition, a single firm may act like a perfect competitor. As long as other equally able firms would enter the market if it became profitable, the incumbent firm cannot raise prices above the competitive level. Note, though, that in this case competition drives price down to average cost, but not marginal cost. (Figure 3) Given fixed costs, a firm that set price equal to marginal cost would lose money. When does competition not work? The simplest and most empirically relevant answer is: when government makes competition illegal. In agriculture, governments have long strived to hold prices above the free-market level. The sector would be perfectly competitive in the absence of regulation, but many deem this outcome politically intolerable. Restrictions on international trade like tariffs do the same for domestic firms. Licensing and related regulations have kept prices above free-market levels in airlines, trucking, railroads, and other industries. The intensity of government restrictions on competition varies. In the post-war era, they were especially draconian in the Third World. Under the rubric of "import substitution industrialization," many less-developed nations cut themselves off from world markets with strict tariffs and quotas. Internal policy matched, with hand-picked firms receiving strict monopoly privileges. Such policies are in retreat, but remain a heavy burden for developing countries. Public opinion and antitrust laws tend to overlook monopolies created by the government. Instead, they focus on firms’ alleged ability to hold prices above average costs even though it is perfectly legal to compete against them. There is a simple, common, and relatively harmless way to achieve this: be the best. If the lowest-cost firm can produce shoes for $10 per pair, and the second-lowest requires $12, then the former can safely charge $1.99 more than its own marginal cost. While this is not perfectly efficient, the problem is mild. Indeed, punishing industry leaders for being the best ultimately hurts consumers by reducing firms’ incentive to leap-frog over the current industry leader. There are two other commonly-cited paths to free-market monopoly: collusion and predation. The idea of collusion is that the firms in an industry stop competing with each other. This might be achieved through merger to monopoly, a formal cartel arrangement, or an informal "gentlemen’s agreement." Under United States antitrust laws, these are all either illegal or heavily regulated. When it was legal, collusion was still easier said than done. Even if the number of firms is small, it is hard to get all of them to sign a cartel agreement, and even harder to actually honor it. As the number of firms rises, the creation of viable voluntary cartels soon becomes practically impossible. Regardless of industry concentration, though, the most fundamental check on collusion is new entry. Once all of the firms currently in the industry raise prices, what happen when outsiders notice their inordinately high profits? Existing firms could invite them to join the cartel, but then the cartel has to share its monopoly profits with anyone and everyone. But if new firms are not admitted, they will undercut the cartel and ruin the arrangement. What about predation? The idea is to condition your price on the behavior of other firms. You threaten to give the product away until you are the only firm left; once consumers have no other choice, you raise prices to recoup your initial losses. But predation, even more than collusion, is easier said than done, and there are few good examples even before the existence of antitrust laws. The hitch is that the predator loses far more money than the prey. If the predator begins with a 90% market share, it loses at least $9 for every $1 than its rivals lose. It is not enough for the predator to have slightly "deeper pockets" to outlast the prey; in this example, their pockets need to be at least nine times as deep. Other factors amplify the predator’s troubles: Rivals can temporarily shut down; consumers may stock up when prices are low, making it hard to recoup the losses; successful predators may attract the attention of large-scale entrants with even deeper pockets than their own. In sum, competition is a robust mechanism for reconciling individual greed and the public welfare. The key is not the number of firms in a given industry, but whether competition is legally permissible. More firms may reduce the probability of collusion, but that is unlikely to happen anyway. "Trust-busting" and other artificial efforts to reduce concentration tend to backfire. Industries are concentrated because the minimum efficient scale is large. Nevertheless, governments can do much to strengthen competition: They can repeal the panoply of policies designed to curtail it.

Economists love counter-intuitive ideas. The two most successful theories in economics are probably comparative advantage and the invisible hand – things that don’t strike the layman as obvious. This leads to us stressing paradoxical notions – like the notion that outsourcing can be a good thing. Good politicians, by contrast, prefer sound-bites that corroborate the public’s prejudices.

if there are a lot of resignations (I doubt it given the golden handcuffs most of the Bank staff are happy to be in), then at least it will make Wolfowitz’s job of cutting the bureaucracy a little easier...

Some worry that his strong emphasis on human rights may complicate relations with China.

In the United States, possession and distribution of marijuana is nominally illegal. But you don’t have to be Tommy Chong to know that pot’s legal status is cloudy and confused. Growing and using "medical" marijuana is legal in 11 states, and in cities like San Francisco it’s easy enough to find locally grown product. In addition to being inconsistent, as critics have long pointed out, the federal ban is also irrational. It treats marijuana differently than similar products for no obvious reason. People use prescription drugs, pot, and alcohol for the same purposes: to get high, relax, and dull pain. The consequences of abuse are similar: crashed cars, disease, and lots of wasted time. So, what makes marijuana special?

In the weeks after Baghdad fell in April 2003, looters systematically dismantled and removed tons of machinery from Saddam Hussein’s most important weapons installations, including some with high-precision equipment capable of making parts for nuclear arms, a senior Iraqi official said this week in the government’s first extensive comments on the looting. (...) The threat posed by these types of facilities was cited by the Bush administration as a reason for invading Iraq, but the installations were left largely unguarded by allied forces in the chaotic months after the invasion. (...) The threat posed by these types of facilities was cited by the Bush administration as a reason for invading Iraq, but the installations were left largely unguarded by allied forces in the chaotic months after the invasion. (...) The United Nations, worried that the material could be used in clandestine bomb production, has been hunting for it, largely unsuccessfully, across the Middle East. In one case, investigators searching through scrap yards in Jordan last June found specialized vats for highly corrosive chemicals that had been tagged and monitored as part of the international effort to keep watch on the Iraqi arms program. The vessels could be used for harmless industrial processes or for making chemical weapons.

Nearly two million people from different regions of Lebanon have gathered in the capital Beirut for protests organized by the opposition party. Members of the press located in the protest region have reported that the protestors are arriving in Beirut by car, ship, and even on foot in preparation for the largest meeting since the assassination of the former Prime Minister Rafiq Hariri on February 14. A traffic jam was reported between the north and the Damascus highways where cars were bumper to bumper, and rally goers arriving in Beirut were demanding an explanation for Hariri’s murder and for the withdrawal of the Syrian troops.

Ask someone if they prefer cheaper clothes prices for the same quality product and the answer is obvious. Likewise the manufacturer who can produce the clothes at a cheaper price but still turn a profit. Especially happy should be the Governments of the manufacturing nation (all those extras jobs) and the consuming nations (all those happy voters/consumers). Alas, not always.

Some industry executives, however, disputed that much had changed. They argue that with the scrapping of quota controls, firms that once disguised their China-made goods as Hong Kong, Macau or Taiwan exports are simply reporting the real country of origin.

"A large part of this increase is just a switch from declared `Hong Kong origin’ to `China origin’, rather than an actual increase in China manufacturing," said one French textile trader. "China quotas used to be more expensive than Hong Kong quotas, so people used Hong Kong quotas for goods made in China. What you see is just the reality that used to be the case for many years." As evidence, the trader argues that mainland logistics firms have not seen any large rises in textile shipments from China in recent months.

relative to expectations... the world economy performed outstandingly well during the second half of the 20th century. Worldwide growth in average per capita income exceeded two percent a year (historically unprecedented), many poor countries became rich, infant mortality declined, diets improved, longevity increased, diseases were contained if not vanquished. Poverty on the World Bank definition of $1 a day (in 1985$) declined dramatically, and the number of persons in poverty was halved despite a more than doubling of the world population... Civil and political liberties also spread during this period, although less certainly and less securely. On the whole, it was a good half century for mankind.

From first-hand reports, it seems that American roadblocks in Iraq are dangerous enough (to all sides) without any need to imagine that the U.S. high command was ordering hits on journalists from one of the administration’s most loyal European allies. Annia Ciezadlo, the Baghdad correspondent for the Christian Science Monitor offers a hair-raising account of what it’s like to pass through those U.S. checkpoints. (...) She goes on to say that an untold number of people are, indeed, shot to death at these places. And that the trauma extends to the U.S. troops who are doing the shooting. Given the prevalence of car-bombs and drive-by attacks, they view every approaching vehicle as a potential mass murder weapon. As I said, the war – as is—is gruesome enough without need to invent conspiracies.

We know of the country’s huge appetite for natural resources. It accounts for up to a quarter of worldwide demand for copper, aluminium, tin and zinc. Steel producers, accustomed to weak demand in the West, have been enjoying a bonanza thanks to Chinese demand. A third of the increase in oil demand last year came from China, helping to drive up oil prices. What is less commented on is the effect of this demand on the global distribution of income. Gerard Lyons, chief economist of Standard Chartered, described China in recent evidence to the Commons Treasury committee as a “Robin Hood economy”, boosting commodity-producing economies, not least those in Africa. Trade between China and Africa is growing rapidly, to the point where it is much more important to the continent’s prosperity than Brown’s poverty-relief efforts.

large part of Japan’s recent economic success is attributable to its role in supplying the Chinese leviathan with capital and other equipment. Asia’s emergence from the economic and financial crisis of the late 1990s has much to do with trade with China. China has a large and rising trade surplus with America but a deficit with the rest of Asia.

Fugitive Taliban leader Mullah Mohammad Omar has lost control of the insurgency in Afghanistan and the number of attacks has fallen dramatically, a senior U.S. general said Monday. Taliban spokesmen have said attacks will resume once the harsh Afghan winter is over. But Major General Eric T. Olson told a news conference in Kabul that the Taliban lacked cohesion and were a fading force in the southern and southeast provinces that had been their strongholds. "We believe that this spring there will be a number of factors combined to make this so-called spring offensive much less effective and much lesser scale than we’ve seen in the past in Afghanistan," said Olson.

1. The flat tax eliminates double taxation on savings and investments. Since all forms of income are taxed once and only once, people are free to choose whichever investment maximizes their profits. Without any government restrictions on certain types of investments, the economy is able to reach its full potential.
2. The flat tax increases government revenue. As a result of a more dynamic economy and less tax evasion, the government actually collects higher revenue. As shown by Laffer’s analysis and by the history of tax cuts in both the USA and the UK, lower tax rates engender a substantial economic boom.
3. The flat tax considerably reduces the time and cost of completing tax forms. With tax forms down to the size of a postcard, the flat tax system makes tax filling much simpler and more efficient. Taxpayers save the money they currently pay for financial advice and guidance, while fiscal specialists are able to switch to more productive forms of economic activity.
4. The flat tax ends special interest lobbying, which is responsible for the growing complexity of the tax regime. Not only is the progressive fiscal system unnecessarily complex, but it also tends to become more and more complicated every year. By eliminating all reliefs and allowances, the flat tax gets rid of all tax lobbyists who try to get new loopholes in the system for the benefit of their businesses.
5. The flat tax exempts the poor from paying any tax by providing a generous tax-free allowance. Due to the generous personal allowance, a large proportion of low-earning individuals pay no tax at all. The personal allowance also makes the tax system progressive for people with average incomes. Only rich people, for whom the allowance represent a minor part of income, pay a rate very close to the flat rate.
6. The flat tax offers individuals more control over their money and reduces government infringements on privacy. Instead of letting the government design biased policies and programmes, people are left with more money to take care of their needs. With diminished government involvement, each person takes individual decisions regarding their pension plans, their mortgage payment, and their charitable giving, none of which is taxdeductible.
7. The flat tax reduces interest rates as a result of the tax-free status of interest. Without an interest tax, lenders are satisfied with lower payments. Overall lower interest rates coupled with advantageous first year 100 percent writeoffs favour entrepreneurial activity and increased capital formation.
8. The flat tax reduces tax evasion, by lowering the opportunity cost of avoiding taxes. People are more willing to pay the correct tax burden when the tax is lowered. Under a flat tax, individuals are less willing to cheat and risk being interrogated by fiscal authorities. Also, the government spends less money on monitoring and auditing a simpler fiscal system.
9. The flat tax makes the British fiscal system more attractive to foreign investment. In a global economy in which investors freely move across country borders, a simple fiscal system attracts global businesses. In turn, foreign investments further boost an economy with a simple, efficient fiscal system.
10. The flat tax achieves simplicity, economic efficiency, and fairness. These are the traditional measures of effective taxation. Evidence from countries that have gone through major fiscal reforms confirms which the flat tax is a viable alternative.

Using different methods of estimation, they estimate that the cumulative payoff from trade liberalization since the end of the Second World War ranges between $800 billion to $1.45 trillion dollars per year in added output. This translates into an added per capita benefit of between $2,800 and $5,000—or, more concretely, an addition of somewhere between $7,100 and $12,900 per American household. As for the future, the gains from future trade expansion have been estimated to range between an additional $450 billion and $1.3 trillion per year in additional national income—which would increase per capita income between $1,500 and $2,000 on an annual basis. The fact is, there are few policies in the U.S. government’s tool kit that consistently yield rewards of this magnitude.

Oh yes, Regime Change! In the upside-down world we now inhabit, that slogan was once the sole property of an internationalist, democratic Left. We can only blame ourselves for ceding such an exhilarating concept to the Neocons. No matter. Regime change it is in Lebanon, it seems. And if the popular tide continues rising, it could wash right into Damascus and sweep the murderous Assad clan from its perch. (...)The outbreak of pro-Democracy movements on the fabled “arab street” can only be cause for celebration and optimism. How about, now, an Arab woman as the next Prime Minister of a liberated Lebanon?

1) Iraqis stood up, en masse (with the Sunni angle not as grim as some have portrayed) against fascistic terror tactics and turned out in numbers that surpassed all but the most optimistic prognostications--in what proved a moving and historic event that loudly showcased a key yearning of the modern era--namely, to have one’s voice heard through democratic governance structures;

2) The Arab world watched this historic election with real fascination and intrigue, and it is probably fair to say it proved a significant strategic blow to the prestige of the insurgents (though they remain resilient and capable of mass carnage as today’s massive suicide bomb showed);

3) Bush’s increasingly direct admonishments to Egypt to further democratize communicated both in his SOTU and by his representatives from diplomats on the ground in Cairo to Secretary Rice is evidently bearing some fruit (yes, with details to be worked out about how real Mubarak’s moves will be--but most analysts appear to see rather important reformist moves in the works);

4) Syria, where I think it’s fair to say our relationship is at somewhat of a crossroads, has basically agreed to withdraw all its troops in Lebanon to the Bekaa Valley and has started turning over big Iraqi Baathist fish to the Americans (it’s gettin’ crunchtime for Bashar, and he is starting to belatedly really get that, it would seem);

5) The Cedar Revolution is filling the streets of Beirut showing the Arab world that, indeed, Bush was right to say Syria was ’out of step’ in a region that is, yes, becoming somewhat intoxicated with these first blushes of real democratization from Baghdad to Beirut;

6) Constructive initiatives are underway vis-a-vis the poisonous Israeli-Palestinian dispute, with Bush having pledged over USD 300MM to the PA, and Sharon and Mazen still doing business post the Islamic Jihad bombing;

7) Saudi Arabia, as Dan Drezner has noted, is making some reformist strides (also reacting to Bush’s prodding in his SOTU and a robust dialogue via our Embassy in Riyadh and elsewhere);

8) Condi Rice is to spearhead a revitalized public diplomacy effort as she indicated in her Senate confirmation hearings--doubtless helping better explain our intentions in the region (and no, they’re not about perma bases in Mesopotamia, helping Zionists take over the Tigris and Euphrates, or making oil grabs in Iraq and Iran) and such a PD initiative will doubtless, in part, thematically link inter-connected developments like the Iraq elections, the civic unrest in Beirut, the reformist resentiment in Cairo;

9) Afghanistan continues to make forward progress towards democratization and greater stability as do other countries in the broader region like Bahrain; and

10) Bush looks to have wisely deemphasized a short-term military option on Iran and is looking to swing Pollack-Takeyh on Iran policy in greater coordination with the Europeans.

The London-based newspaper Al Quds al-Arabi, which has for some time been a surrogate voice for "insurgent" talk in the Arab diaspora, polled its readers after the Iraqi elections and had the grace to print the result. About 90 percent had been favorably impressed by the sight of Iraqi and Kurdish voters waiting their turn to have a say in their own future. This is a somewhat more accurate use of the demotic thermometer than the promiscuous one to which we have let ourselves become accustomed. Meanwhile, the streets of, say, Beirut have been filled with demonstrators who are entirely fed up with having their lives and opinions taken for granted by parasitic oligarchies. Of course, every now and then one still reads polls, conducted by who knows what measurement, that appear to state the contrary. For some reason, the Pew Center seems especially keen on publicizing these sorts of mass-opinion finding. You’ve seen them: Nine out of 10 Moroccan teenagers have a poster of Osama Bin Laden on their bedroom walls and so forth. Yet these findings don’t seem to translate into anything much: The Muslim population with the closest experience of Bin Laden was the Afghan one, and the Afghan street, to judge by all available evidence, rejected him and ignored his threats in crushing and overwhelming numbers. In the Palestinian elections, boycotted by the Islamists, a fairly solid turnout split the votes between Mahmoud Abbas and Mustapha Barghouti, the latter of whom scored an impressive 20 percent or so for a secular program. Where Hamas has done well in local elections in Gaza, it has been due to grass-roots welfare and social policy as much as to intransigent anti-Zionism, and it’s possible to imagine the organization evolving, as has Hezbollah in Lebanon, into a quasi-political party with seats in the assembly. The logic of this, all rhetoric to one side, points largely in one direction. Other Muslim streets are even more problematic for those who lazily assume that the jihadists are the voice of the unheard. The populations of Bosnia and Kosovo—populations that actually did have to confront anti-Muslim violence on a large scale—are generally hostile to Bin-Ladenism. Nobody has ever used the term "Iranian street," at least in print or on broadcast news, if only because everyone knows that Iranian opinion, as registered during the mock elections or voiced to visiting hacks, is strongly against the reigning theocracy.

The collapse of communism in Eastern Europe happened after reformists first attained power through elections in Poland and Hungary. It happened rapidly, with no one comprehending the speed with which the old, corrupt edifices of power crumbled. Could the example of elections in one Muslim country in the Middle East have a similar ripple effect?

Let’s start with two fundamental truths about Wal-Mart. First, our success comes from delivering quality merchandise at everyday low prices in ways that raise the standard of living of the millions of Americans who shop in our stores each year. Independent analysis says that nationally we save consumers upwards of $100 billion a year; in Southern California it has been estimated that, if given the chance, we’ll save the average family nearly $600 a year at the grocery checkout alone. These savings are a lifeline for millions of middle and lower- income families who live from payday to payday; in effect, it gives them a raise every time they shop with us. Seen another way, Wal-Mart acts as a bargaining agent for these families -- achieving on their behalf a “negotiating power” they would never have on their own. Need some examples? $1.86 may not sound like much to you, but at Wal-Mart, it buys a family two loaves of bread instead of one. $37 doesn’t sound like much money – yet at Wal-Mart, it will get a family a darned good DVD player. Multiply such examples a thousandfold and you begin to see how Wal-Mart harnesses the collective clout of ordinary Americans to make their lives better.
(...)
Wal-Mart’s average wage is around $10 an hour, nearly double the federal minimum wage. The truth is that our wages are competitive with comparable retailers in each of the more than 3,500 communities we serve, with one exception -- a handful of urban markets with unionized grocery workers. This is only common sense. If Wal-Mart weren’t an attractive place to work, we wouldn’t find ourselves, as we typically do, with thousands of applications for the hundreds of jobs we create when we open a new store. Nor would so many of our associates urge their friends and relatives to join us. In addition, the growth opportunities we offer our associates and suppliers are unparalleled. Seventy-six percent of our store management started their careers with Wal-Mart in hourly positions; every year thousands of hourly associates are promoted into management and most of these jobs do not require a college degree. Of course, it’s not just our associates. Countless suppliers have also grown with us over the years, turning hundreds of small businesses into remarkable entrepreneurial success stories. Let’s talk now about benefits. Few people realize that about 74 percent of Wal-Mart hourly store associates work full-time, compared to 20 to 40 percent at comparable retailers. This means Wal-Mart spends more broadly on health benefits than do most big retailers, whose part-timers typically are not offered health insurance. You may not be aware that we are one of the few retail firms that offer health benefits to part-timers. Premiums begin at less than $40 a month for an individual and less than $155 per month for a family. And unlike coverage at many companies, our health plan has no lifetime maximum after the first year, meaning that if serious illness strikes, our associates don’t need to add financial worries to their concerns for their loved one.
(...)
Retail sector wages have been about 25 percent lower than economy-wide wages for the last 15 years and this gap is at least as large in other advanced nations. Auto wages, by contrast, have been 40 to 50 percent higher than economy-wide wages. What explains these longtime realities? Economists will tell you they are driven NOT by the presence or absence of unions, but by the underlying nature of the business. Auto manufacturing is a highly capital intensive industry, where enormous sums are invested in machines and technology that make the output per worker very high. Retailing is the opposite. While we at Wal-Mart pride ourselves on our cutting-edge technology, retailing remains a very labor intensive business. A single Ford worker might operate dozens of computer-controlled robots that assemble a car. In a Wal-Mart store, hundreds of associates are helping customers find what they need and check out fast. Due to these differences in the nature of the business, sales and profit per employee – which go far to explain what levels of wages are sustainable in any business -- are much lower in retail than in automaking. It is true that our customers have now made Wal-Mart one of the biggest companies in America, and we’re proud of what that says about the way we serve them. But here’s the point: whether we have 30 stores or 3,000 stores, this is still retail. If you’re with me on why retailing can’t be expected to perform the same function in the economy as GM, let’s move on to the related myth that Wal-Mart is somehow “driving down” the quality of U.S. jobs. The truth is more nearly the opposite: Wal-Mart has dramatically upgraded the nature of retail work in America.

Taiwanese factories in Dongguan [a city between Hong Kong and Guangzhou and a major centre of manufacturing] are facing a problem. According to a news report in the United Daily in Taiwan, over a thousand workers at a factory, which produces goods for big brand names such as Nike, demonstrated for two days and damaged equipment and factory cars. 500 armed police arrived and quashed the riot. Several leaders were arrested. The main cause for the riot was the limitation on working hours at the factory. The shorter hours have been requested by US companies so as to avoid criticism from various groups on long working hours. However, the mainly migrant workforce want to work longer hours so they can earn more. Consensus had been reached by the US companies, the Taiwanese-invested factory and local government that the maximum working hours per week should be set at 60 hours [which is still a breach of Chinese Labour Law, but less than other manufacturing plants]. However, this reduction in hours was unsatisfactory for the workers and the resulting riot was serious.

President George Bush subjected Russia’s Vladimir Putin to a public lecture on the fundamentals of democracy yesterday, injecting a chill into a relationship that has - until now - been characterised by bonhomie.

"Democracies always reflect a country’s customs and culture, and I know that," Mr Bush said. "Yet democracies have certain things in common; they have a rule of law, and protection of minorities, a free press, and a viable political opposition."

Wind farms are an expensive and inefficient way of generating sustainable energy, according to a study from Germany, the world’s leading producer of wind energy. The report, which may have ramifications for the UK’s rapidly growing wind farm industry, concludes that instead of spending billions on building new wind turbines, the emphasis should be on making houses more energy efficient. Drawn up by the German government’s energy agency, it says that wind farms prove a costly form of reducing greenhouse gases.

Europe supports its sugar producers with an astounding tariff of 300% while also dumping 5 million tons a year on world markets at knockdown prices. Without such a gargantuanly uneconomic — and immoral — subsidy European farmers wouldn’t find it profitable to grow sugar beet. Guess who would then be able to grow it instead?

One of my professors cited a statistic that the cost of protecting US textile jobs is $18,000 per worker per year to US consumers. It would be cheaper to just pay to retrain all US textile workers and support them for a few years of transition than to keep protecting their jobs.

If you are concerned about poverty, you should admire corporations that go to labor-abundant countries. Contrary to popular perceptions, multinational corporations actually pay wages that are significantly higher than those paid by local firms employing similar workers. The multinational jobs have been among the most coveted jobs in developing countries. Even while growing up in India, I remember looking with envy at those employed with Pan Am, IBM and Coca-Cola. Students on campus have their hearts in the right place when they show concern about the exploitation of sweatshop workers in the poor countries. But they must dig deeper. They must ask why the workers in Calcutta are lining up for jobs with the multinationals before they begin demanding an end to the exploitation.

A property rights approach to fisheries management can effectively prevent overfishing while increasing the profits of fishermen. One such system is to issue individual transferable quotas (ITQs) to fishermen, which grant them exclusive rights to harvest fixed percentages of the total allowable catch. (While ITQs may be considered to create property rights, they are not “property interests” for purposes of the takings clause of the Fifth Amendment of the Constitution.) Like pollution permits, ITQs are transferable, ensuring that the fish will be caught by the most efficient and least wasteful boats, while all owners of a fishery can reap the benefits of a healthy and profitable fish stock. Unlike command-and-control approaches, ITQ programs end the incentive for fishermen to “race to fish.” This observation is well demonstrated by Alaska’s sablefish and halibut fisheries where, prior to the introduction of property rights, the fishing season was progressively shortened to prevent the annual catch from exceeding its cap. Fishermen responded to the shortened season by increasing the number of vessels in their fleets and using more gear in an all-out effort to catch as much as possible before the overall cap was reached. These “frantic derbies” led fishermen to take undue risks by heading out in dangerous weather, and led to a glut of fresh fish on the market during the few short weeks of harvest and scarcity the rest of the year. Alaska’s halibut and sablefish ITQ programs, implemented in 1995, ended the race for fish and increased season length from less than 5 days per year to 245 days per year. Commercial fishermen have since enjoyed increased profits, decreased costs of gear and fishing crews, and a safer and more stable industry. The availability of high-quality halibut year-round has benefited consumers, and environmental benefits have been realized in connection with decreased halibut mortality. ITQs have also been adopted in New Zealand, Iceland, Australia, Canada, and Papua New Guinea, among other countries. They have improved fish stocks while also increasing the profitability of many fisheries. New Zealand’s extensive system of ITQs was introduced in 1986 and, as of 1996, it accounted for more than 85 percent of that country’s total commercial catch. New Zealand fish stocks are now healthy, and increases in quota prices provide evidence of increased profitability. There is evidence that New Zealand’s ITQs have also encouraged investment in scientific research.

One of the world’s greatest marshland habitats - and home of an ancient culture - is beginning to show the first signs of recovery after decades of systematic destruction under Saddam Hussein. An international scientific assessment of Iraq’s drained wetlands, the first since they were partially reflooded after the downfall of Saddam, has found that the giant reeds are growing once more and the water birds and otters are returning.

You know, in Europe they don’t like to hear it, but in fact we owe a lot to US president George W Bush. In his State of the Union of 2003, he promised 15 billion dollars to the fight against AIDS in developing countries. And what’s at least as important: he kept his promise and we received the money. The volume of the amount has completely changed our financial position. Before, at best we received a hundred million here and some millions there. When UNAids was established in 1994 we had an annual budget of 200 million dollar. Peanuts. Now we have 6.1 billion dollar each year. Bush imposes three conditions. First, the money must go to fifteen concentration countries: Botswana, Ivory Coast, Ethiopia, Tanzanya, Vietnam etc. All countries that are heavily affected by AIDS. Secondly, the largest part of the budget should go to treatment of already infected persons. For that, we have to use brand drugs, not the cheaper ’generic’ drugs, as they are called. As far as prevention is concerend, one third should go to programs that are promoting abstention from sex. Did you know that, for example, the US is the largest funder of condoms in developing countries? And don’t forget that there often is a difference between American rhetorics on sex-related subjects like AIDS, and what really happens on the grond. The neocon ideas that go around the world, are in fact intended for domestic use in the US. For Bush, it is a way to connect with the fundamentalists of the christian right. But in practice and on the ground, the impact of these views is relative. Moreover, it is not only the US that impose conditions on USAids. The Scandinavian countries are imposing conditions too. Sweden, Norway and Finland are heavily against the distribution of clean needles to drug addicts.

A gem from Krugman’s latest column, guaranteed to bring a smile to those of us who teach economic history for a living:

In fact, by taking on Social Security, Mr. Bush gave the Democrats a chance to remember what they stand for, and why. Here’s my favorite version, from another fighting moderate, Eliot Spitzer: "As President Bush embraces the ownership society and tries to claim that he is the one that is making it possible for the middle class to succeed and save and invest - well, I say to myself, no, that’s not right; it is the Democratic Party historically that created the middle class."

I guess Krugman has learned the first rule of advocacy journalism: there’s no need to make an indefensible claim yourself when you can quote someone else doing it for you. I would have thought it was the Industrial Revolution that created the middle class, seeing as how countries without industrialization did not develop a middle class, no matter what kind of democratic politics prevailed. Do Krugman and Spitzer really believe that the US lacked a middle class before Franklin Roosevelt’s tax-and-transfer policies?

Listen to this. The Afghanistan government may be forced to give subsidies to farmers to persuade them not to grow opium. (poppies account for 60% of economic activity) and to grow wheat, rice and cotton instead. Farmers can’t compete with Western exports of these commodities because they are so highly subsidised. Hang on a minute. Wouldn’t it be simpler for the US, Japan and Europe to abolish their own subsidies (thereby returning money to taxpayers) rather than pricing Afghanistan’s agriculture out of the market?

Winning the Battle Against Global Climate Change

De regering van Bush is verantwoordelijk voor de inval in Afghanistan en de bezettingsoorlog in Irak. In eigen land voert deze regering een asociaal en ultrarechts beleid, getuige de laatste begroting waar de uitgaven voor alle departementen (de sociale zekerheid op kop) gehalveerd worden, behalve Defensie en Terrorismebestrijding die meer geld krijgen. Tegelijk houdt de VS in zijn eentje de uitvoering van het Kyoto protocol tegen, zegde ze eenzijdig het ABM-verdrag op en erkent ze het Internationaal Strafhof van Den Haag niet. Het is deze regering die, in naam van vrijheid en democratie, het martelen van vijanden aanmoedigt. Een dergelijke ‘leider van de vrije wereld’ is voor ons niet welkom in België.

"Ik dacht dat Bush de verkiezingen zou verliezen, met wat er allemaal gebeurd was... Maar in de tijd van Reagan dachten we precies hetzelfde, en hij heeft er uiteindelijk voor gezorgd dat de Muur viel. Misschien dat we over tien jaar ook helemaal anders tegen déze feiten aankijken, en de geschiedenis helemaal anders wordt geschreven dan wij nu denken. Je moet durven inzien dat dat mogelijk is. Het grote gelijk bestaat niet. Het kan ook allemaal omklappen. Stel dat straks de democratie in Irak marcheert, dat ook Iran zich aanpast, dat Egypte en Saoedi-Arabië onder druk van de omstandigheden moeten veranderen... Je weet het niet. Als het extremisme daardoor afneemt en de omstandigheden van de mensen in de Arabische wereld veranderen... Ik durf echt niet te zeggen hoe de geschiedenis er over twintig jaar zal uitzien."

(...) I’m sticking to my basic point, which is that there’s a trade-off between big government and redistribution. Higher government spending – in itself – is not necessarily egalitarian. Sure, the two are compatible in the sense that the government could raise both taxes and benefits, but there are many other ways in which the state grows over time.

Reformers blame problems on the legacy of 40 years of communism. But could it be that the reform process itself is responsible? Far from being a panacea, as claimed by eastern Europe’s political elite, following the IMF-EU economic prescription has caused hardship for millions.

For starters, speaking only of Hungary, the warm and fuzzy Kadar economy was built on borrowed cash. With plenty of World Bank money on tap, the Kadar gov’t borrowed and spent like a drunken sailor, artificially raising living standards and burrying Hungary in debt. The "prosperity" of the 70s and 80s was a potemkin village, while rot ate everything behind the pretty facade. What did Hungary make in the 80s that anyone wanted to buy -- except for the food that COMECON countries bought? The years after transition represented the collapse of the Kadar non-economy when Hungary could no longer pay for it. Ask any Hungarian economist from that era -- regardless of their political affiliation. The system was totally bankrupt. Since then, living standards have steadily returned and surpassed the debt binge days of the 80s thanks to the open economy. Yes there are areas of severe poverty. Mostly among Roma and the rural population. That can be blamed squarely on discrimination against and isolation of the gypsy community and lack of education and training available in the countryside going back to the 80s and continuing now. Hungary’s problem now is an education problem. More companies want to come here and are running out of skilled people. As for those with an education, more are coming back now and fewer are leaving. It’s the same phenomenon we’ve seen in Ireland and Spain. As for the euro, he seems to be saying that EE has seen only deflation since the 1980s.?? I think he’s missing out on all the massive bouts with inflation. I remember when inflation here was 30%. The Maastricht criteria are very strict and keeping to 3% on budget deficits I agree doesn’t make much sense for the faster growing economies out here, but they will get a lot from the euro, like currency stability. The key will be what exchange rate they enter at. The bottom line is the prosperity you see in Eastern Europe is real. It’s built on actually productive economies that make things (services, too) that the rest of the world wants to buy. What they offer is also becoming increasingly more sophisticated, so it’s not all going to disappear to China tomorrow. Debt levels are sustainable and economies are growing. Elderly without extra family support, rural uneducated people and Roma have gotten screwed. No question. You can blame the first squarely on Kadar, the second partially on the lack of effort to boost education and the last on racism. But EVERYTHING would be worse if it were not for reforms, including decreasing the size of government -- which did almost everything badly here, and opening the country to foreign investment. Where else would they get the resources to development their economy? They have no natural resources -- which would be a curse anyway. They need to sell their skills and brains. They are doing that with the help of the foreigners who built the factories, call centres, R&D centres, etc etc. Finally, if neo-liberal reforms are so bad, why have the countries that have adopted more of them so much better off than the countries that have not? Compare Hungary and Poland to Romania. End of story. Romania is finally getting its act together and growth is going to take off-- in fact, it already has.

The U.S. Constitution’s First Amendment guarantees freedom of political speech. For example, one is free to advocate the violent overthrow of the State, as long as there is no likelihood that anyone would actually heed those words.

1) Conditional convergence, as predicted by the Solow model, is present in the 1980-99 data, and seems to be a fundamental aspect of the underlying growth process. Other things equal, a country’s growth rate will tend to decline as its per capita income rises, though the actual rate of decline is quite slow. Nonetheless, this factor must be taken into account in any empirical growth analysis.
2) High population growth, as measured by the fertility rate, has a negative effect on economic growth. The worldwide trend over the past few decades has been in the direction of declining fertility levels, but they still remain quite high in many less developed countries. A continuation of this trend would provide some grounds for optimism regarding the prospects for growth in low-income countries. Countries that maintain persistently high population growth, however, will be at a disadvantage in terms of per capita income growth.
3) Investment in physical capital is important, and countries that save/invest a large share of GDP will grow faster than countries that save/invest little.
4) Human capital is also important for economic growth, and here too there is much scope for improvement. In 1995 the average level of the Barro-Lee educational attainment measure (“average years of schooling for the population aged 15 or over”) was about 6 years per adult, with a median value of 5.82 years. In other words, in half of the countries surveyed in Figure 14, the average adult has not completed primary education. Major improvements in this area can be expected to boost per capita income growth in less developed countries in the foreseeable future, and should remain a priority for development policy planners.
5) Perhaps the most important conclusions of this study relate to the role of economic freedom. Higher degrees of economic freedom, as measured by the EFW index, are associated with higher rates of economic growth. The main channel of influence appears to be through a direct “productivity effect,” since many of the components of the EFW index amount to measures of price distortions, which can be expected to affect economic growth through their effects on efficiency in the allocation of resources. An indirect “incentive effect” via the investment rate may also be present, but the evidence is less clear on this point (though there does appear to be a strong positive relationship between economic freedom and the productivity of investment).
6) Geography is a factor that should be taken into account in explaining cross-country variations in growth rates, since tropical countries are at a disadvantage in terms of economic growth. This pessimistic conclusion, however, should be tempered by a healthy dose of pragmatism: geographic location is a unalterable fact, and there is nothing that can be done about it, though much can be done in terms of the other determinants of economic growth. The penalty for “tropicality” can be overcome, for instance, by promoting policies that increase the level of economic freedom. In tropical countries, therefore, the case for economic freedom is even stronger than in non-tropical countries.
Finally, though these variables explain a large share of the observed cross-country variation in growth rates, a significant portion of this variation (over 20 %) remains unexplained. Some part of this, no doubt, is due to measurement error, and country-specific factors also play some role.

Microsoft’s top security honcho insisted Thursday that Microsoft "is making progress on security using any reasonable metric." Mike Nash, the company’s chief security executive, made the comment during an online chat session just days after Microsoft rolled out its biggest bunch of Windows patches since April 2004. Nash staunchly defended the Redmond, Wash.-based developer’s progress, and compared Windows’ flaws with those in open-source Linux operating systems from Red Hat and Novell’s SuSE. "Even with the relatively large number of bulletins we released this week, we compare favorably," he said. "Year-to-date for 2005, Microsoft has fixed 15 vulnerabilities affecting Windows Server 2003. In the same time period, for just this year, Red Hat Enterprise Linux 3 users have had to patch 34 vulnerabilities and SuSE Enterprise Linux 9 users have had to patch over 78 vulnerabilities."

Some of the things I’ve seen with my own eyes over the years are so outrageous that it’s extremely difficult for me to believe that any African “leaders” have their subjects’ interests at heart - I came to libertarianism via real-world schooling in African political corruption, not by some tedious Randite doorstop.

I found it a bit perplexing that the participants in the Harvard press conference had come to the conclusion that global warming was impacting hurricane activity today. To my knowledge, none of the participants in that press conference had performed any research on hurricane variability, nor were they reporting on any new work in the field. All previous and current research in the area of hurricane variability has shown no reliable, long-term trend up in the frequency or intensity of tropical cyclones, either in the Atlantic or any other basin. The IPCC assessments in 1995 and 2001 also concluded that there was no global warming signal found in the hurricane record. Moreover, the evidence is quite strong and supported by the most recent credible studies that any impact in the future from global warming upon hurricane will likely be quite small. The latest results from the Geophysical Fluid Dynamics Laboratory (Knutson and Tuleya, Journal of Climate, 2004) suggest that by around 2080, hurricanes may have winds and rainfall about 5% more intense than today. It has been proposed that even this tiny change may be an exaggeration as to what may happen by the end of the 21st Century (Michaels, Knappenberger, and Landsea, Journal of Climate, 2005, submitted). It is beyond me why my colleagues would utilize the media to push an unsupported agenda that recent hurricane activity has been due to global warming. Given Dr. Trenberth’s role as the IPCC’s Lead Author responsible for preparing the text on hurricanes, his public statements so far outside of current scientific understanding led me to concern that it would be very difficult for the IPCC process to proceed objectively with regards to the assessment on hurricane activity. My view is that when people identify themselves as being associated with the IPCC and then make pronouncements far outside current scientific understandings that this will harm the credibility of climate change science and will in the longer term diminish our role in public policy.

The environmental assessment of the impact of global warming in Denmark is that overall it will be slightly positive. We’ll have better agricultural production. We’ll probably have better forestry. We will, however, also have more flash rain. That will be a negative. One of the most typical examples we’re told is that people will die from heat waves from global warming. That’s true. People will die from heat waves. What you really seem to forget is in most advanced countries, the cold deaths outweigh heat deaths two-to-one. And of course while you will get more heat deaths, you will also get many fewer cold deaths, and actually a research team looking at the cold and heat deaths around Europe estimated that for Britain global warming will mean 18,000 fewer deaths.

Bush declared, "America will stand with the allies of freedom to support democratic movements in the Middle East and beyond, with the ultimate goal of ending tyranny in our world." And he named names, calling upon Saudi Arabia and Egypt, two autocracies long supported by Washington, to move toward democracy. Certainly, he--or Condoleezza Rice--might be on the phone tomorrow to Cairo and Riyadh, explaining that Bush does not expect immediate action. Nevertheless, such words probably will provide encouragement to democracy activists in those countries and in others. These people, though, should keep in mind that Bush’s father--who clearly is no role model for his son--egged on the Shiites in Iraq at the end of the Gulf War and then did not come to their rescue when they were slaughtered. Bush also showed he has not lost his appetite for regime change and muscle-flexing. He warned Iran to abandon any pursuit of nuclear weapons, vowing that America will stand with Iranians who seek liberty. He placed Syria in the crosshairs. There was no reference to the "axis of evil," but Bush did move Syria ahead of North Korea in the you-better-worry-next category. This president does not back down. Perhaps that’s why he won in November. He repeated his assertion that Iraq "is a vital front in the war on terror, which is why the terrorists have chosen to make a stand there. Our men and women in uniform are fighting terrorists in Iraq, so we do not have to face them here at home." US forces in Iraq, according to the US military, are mostly fighting Baathists who had no intention of attacking the United States "at home" prior to the invasion. But Bush sticks to his talking points. And he again pledged to stay in Iraq for as long as necessary, while maintaining "we will increasingly focus our efforts on helping prepare more capable Iraqi security forces." Without referring directly to his critics, he dismissed calls for establishing any exit plan with language that was noble: "We will not set an artificial timetable for leaving Iraq, because that would embolden the terrorists and make them believe they can wait us out. We are in Iraq to achieve a result: A country that is democratic, representative of all its people, at peace with its neighbors, and able to defend itself. And when that result is achieved, our men and women serving in Iraq will return home with the honor they have earned." Bush did not denounce his opponents; he cut back on the references to God. But he invoked FDR and the power of the American dream, comparing his project in Iraq to the abolition of slavery, the liberation of Europe, and the defeat of imperial communism. He was riding high on the high road.

The Prime Directive really takes us to the heart of the paradox of Star Trek. The United Federation of Planets is committed to non-interference in the affairs of other planets; Captain Kirk and his crew are not supposed to change the way of life of other civilizations. But, of course, they do it every episode--they just go right through the galaxy destroying one functioning civilization after another. I show that Kirk has a particular hostility to any civilization that smacks of theocracy or aristocracy. What it comes down to is this: the Enterprise will not interfere in a planetary civilization--provided that it looks just like John F. Kennedy’s 1960s America. But if it does not, it’s time to get out the phasers and blast away--to take down the Greek god Apollo, for example. Star Trek provides a perfect reflection of the paradoxes of America’s foreign policy--the non-democratic imposition of democracy around the world. The Enterprise was out to make the galaxy safe for democracy--and it would destroy any civilization that stood in its way. Gene Roddenberry’s message was clear: woe to any planet not ruled by a liberal democrat.

Stiglitz’s The Roaring Nineties partially blames the big accounting scandals on market fundamentalism. But I’m inclined to agree with Henry Manne that one of the best cures for fishy accounting is to legalize insider trading. (...) Take one of the simpler complaints about U.S. accounting: failure to count the cost of stock options. If insider trading were legal, then insiders – like accountants at Arthur Andersen - could sell the stock of firms the knew to have poorly disclosed but seriously expensive stock options. The information pours into the market, the exaggerated earnings statements fail to impress, and Mr. Small Helpless Investor doesn’t get any rude surprises from his broker when news finally trickles down to the New York Times. I guess Stiglitz would deride my proposal as "market fundamentalism," but I call it common sense.

A quarter of a century after Saddam Hussein executed its leaders and drove their comrades underground or into exile the Iraqi Communist party has resurfaced and looks set to make a respectable showing once votes are counted in Sunday’s elections. The party has attempted to mount a secular challenge to the Islamists who dominate the main coalition appealing to the Shia vote in the south. In doing so they have rekindled a struggle for the minds of Iraq’s historically marginalised Shia majority that stretches back to the middle of the last century.

The McDonald’s restaurant in Hermiston, Oregon appears to be "outsaucing" customers [sic] drive-thru meals. The restaurant on Highway 395 has outsourced one of the most important jobs at the drive-through window -- order taking. When a customer drives through, they’ll be patched through to Grand Forks, North Dakota to place the order. Why? Because the minimum wage in North Dakota is $5.15, compared to Oregon’s $7.25.

Bill Clinton in Davos took a shot at the current administration, reportedly suggesting that some of the money used for the war in Iraq could have been better used in Africa. This may be true, but it is certainly rich coming from Clinton, who completely failed to defend the US foreign aid budget. Under his watch, US ODA to Africa fell precipitously. And, for all his faults, Bush has overseen huge increases in aid to Africa. It’s true the 2003 figure of $4.6 billion is inflated because it includes $1.2 billion as the debt write-off for DRC, but even not counting that, American aid to Africa is up 188% since 2000. Among the 22 DAC members, only Belgium has increased by more. Aid proponents, especially in Europe, have plenty of reason to be upset with Bush, but aid levels to Africa is not one of them.

For the naysayers:

Voting was to have ended at 1700 (1400 GMT) but was extended to allow people waiting at polling stations to cast their ballots.

There was cautious optimism across America and the Middle East as the polls closed today in Iraq’s first multi-party elections in 50 years. Arab commentators said that the voters had sent a strong message that insurgents failed to wreck the poll. The most upbeat reaction came from the Abu Dhabi-based daily Al-Ittihad, which declared jubilantly "The new Iraq is born today" on its front page. The Arab News newspaper in the kingdom of Saudi Arabia called the vote "a very historic moment in the country’s long history," and said it was "a much needed victory for moderation." But analysts also voiced concern that the chaos had not allowed for truly representative elections. "We don’t want to drown in optimism," said the Qatar daily Al-Sharq. "For we know that the elections in Iraq aim for democracy, but it is not held in such an atmosphere."

Al Qaeda’s group in Iraq said 13 of its suicide bombers were involved in a string of attacks against election centers in Iraq Sunday, according to an Internet statement. "Thirteen lions from the martyrs brigade of the Al Qaeda Organization for Holy War in Iraq launched attacks on the centers of infidelity and apostasy (polling stations) in various regions of Iraq," said the group led by al Qaeda’s leader in Iraq, Abu Musab al-Zarqawi. "Other brigades of the organization launched at least 30 rockets inside the Green Zone and some polling stations and all Sunni areas saw confrontation today," the statement said. Militants struck mainly in Baghdad, rocking the capital with nine suicide blasts in rapid succession. Zarqawi, whose group has claimed some of the bloodiest attacks in Iraq, last week declared all-out war on the elections. The Jordanian militant is the United States’ number one enemy in Iraq. Sunni guerrillas have intensified their suicide bombings and killings of Iraqi officials in a bid to disrupt the general election, which Shi’ite Muslims are poised to win. In earlier Internet statements the group said it was behind seven attacks on polling stations and U.S. forces in Iraq’s northern city of Mosul Sunday, as well as an unspecified number of attacks on other polling stations.

We would love to share what we did this morning with the whole world, we can’t describe the feelings we’ve been through but we’ll try to share as much as we can with you. We woke up this morning one hour before the alarm clock was supposed to ring. As a matter of fact, we barely slept at all last night out of excitement and anxiety. The first thing we saw this morning on our way to the voting center was a convoy of the Iraqi army vehicles patrolling the street, the soldiers were cheering the people marching towards their voting centers then one of the soldiers chanted "vote for Allawi" less than a hundred meters, the convoy stopped and the captain in charge yelled at the soldier who did that and said: "You’re a member of the military institution and you have absolutely no right to support any political entity or interfere with the people’s choice. This is Iraq’s army, not Allawi’s". This was a good sign indeed and the young officer’s statement was met by applause from the people on the street. The streets were completely empty except for the Iraqi and the coalition forces ’ patrols, and of course kids seizing the chance to play soccer! We had all kinds of feelings in our minds while we were on our way to the ballot box except one feeling that never came to us, that was fear. We could smell pride in the atmosphere this morning; everyone we saw was holding up his blue tipped finger with broad smiles on the faces while walking out of the center. I couldn’t think of a scene more beautiful than that. From the early hours of the morning, People filled the street to the voting center in my neighborhood; youths, elders, women and men. Women’s turn out was higher by the way. And by 11 am the boxes where I live were almost full! Anyone watching that scene cannot but have tears of happiness, hope, pride and triumph. The sounds of explosions and gunfire were clearly heard, some were far away but some were close enough to make the windows of the center shake but no one seemed to care about them as if the people weren’t hearing these sounds at all. I saw an old woman that I thought would get startled by the loud sound of a close explosion but she didn’t seem to care, instead she was busy verifying her voting station’s location as she found out that her name wasn’t listed in this center. How can I describe it!? Take my eyes and look through them my friends, you have supported the day of Iraq’s freedom and today, Iraqis have proven that they’re not going to disappoint their country or their friends. Is there a bigger victory than this? I believe not.

I’ve just come out of a very big polling station where there are queues of people waiting to get in there. Masses of women. I’m amazed at the turnout of women. And inside the polling station there’s a sort of air of celebration there. One man said to me, ’It’s like a wedding.’ Another man said, ’It’s like Christmas’. And do you know, there’s a general feeling that this is a day of celebration for these people. I think it’s going to be a massive turnout here. It was slow to begin with and then it sort of speeded up. There were four explosions here early this morning, mortar explosions, but it doesn’t seem to have deterred people. We were amazed as we came down the main street: whole families were out, just strolling in a very leisurely way towards their local polling station; somebody had even brought sweets into this polling station for the voters; there was a big tray of sweets. I’m standing here just at the entrance to it now and I’ve talked to quite a few of the women and they’re very excited because this is their first opportunity to vote; and they keep coming towards us, you know, streaming down the street. ... I think people will be amazed when the turnout is known at the end of the day.

Even in Falluja, the Sunni city west of Baghdad that was a militant stronghold until a U.S. assault in November, a steady stream of people turned out, confounding expectations. Lines of veiled women clutching their papers waited to vote. "We want to be like other Iraqis, we don’t want to always be in opposition," said Ahmed Jassim, smiling after he voted.

[If] the insurgents wanted to stop people in Baghdad from voting, they failed. If they wanted to cause chaos, they failed. The voters were completely defiant, and there was a feeling that the people of Baghdad, showing a new, positive attitude, had turned a corner. No one was claiming that the insurgency was over or that the deadly attacks would end. But the atmosphere in this usually grim capital, a city at war and an ethnic microcosm of the country, had changed, with people dressed in their finest clothes to go to the polls in what was generally a convivial mood.

Some came on crutches, others walked for miles then struggled to read the ballot, but across Iraq, millions turned out to vote Sunday, defying insurgents who threatened a bloodbath. Suicide bombs and mortars killed at least 27 people, but voters still came out in force for the first multi-party poll in 50 years. In some places they cheered with joy at their first chance to cast a free vote, in others they shared chocolates.

Tegenover diegenen die discriminatie "onchristelijk" noemen, citeert Storme uit het Mattheusevangelie, hoofdstuk 20, vers 13. De landeigenaar die arbeiders had gehuurd voor zijn wijngaard betaalde aan de ’arbeiders van het elfde uur’ evenveel als wat hij had toegezegd aan de arbeiders die de hele dag hadden gewerkt. Deze laatsten kloegen over discriminatie, en het Bijbelse antwoord luidde: "Ik doe je geen onrecht. We waren het toch eens geworden voor een denarie? Ik wil die laatste evenveel geven als jou. Of mag ik niet met het mijne doen wat ik wil? Of ben jij jaloers omdat ik goed ben?" Storme: "Christus zou vandaag in dit land in de gevangenis belanden wegens aanzetten tot discriminatie. En hij heeft toen reeds de vinger op de wonde gelegd: het eisen van gelijke behandeling is zelf ingegeven door onethisch gedrag, namelijk afgunst. Antidiscriminatiewetgeving is het product van een afgunstmaatschappij. Hoe kunnen we dan in hemelsnaam in het ethisch karakter ervan geloven?"

For all his charisma, even Luiz Inácio Lula da Silva, who came to power as the idol of Latin America’s Left, found it hard to sell his orthodox economic policy at the World Social Forum in Porto Alegre, Brazil, on Thursday. His audience of 10,000 anti-globalisation activists was already miffed at the Brazilian president’s decision to attend the World Economic Forum on Friday to meet the bigwigs of capitalism they so despise. But having to defend two years of textbook economic orthodoxy and cosy relations with the International Monetary Fund was too much for disenchanted supporters at an event launched as a challenge to Davos, Switzerland, five years ago. As a former union leader who in the late 1970s took on big business and a military dictatorship, Mr Lula da Silva was quick to snap back at his hecklers. “That noise comes from those . . . who don’t have patience to hear the truth,” he retorted, in reference to spontaneous jeering.

Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that’s hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments. All three have regarded capitalism as the ’natural’ system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. From [my samplings] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so.

democratic liberties have not yet appeared, except fleetingly, in any nation that has declared itself to be fundamentally anticapitalist

The US had earmarked $780 million this year for Afghanistan’s drug fight, including $300 million for eradication and $152 million for aerial spraying due to start in March. Now, the US State Department is reportedly reworking the budget proposal, possibly removing funds for spraying. "We don’t know the side effects of spraying. Also, Afghans are not used to seeing this kind of thing [spraying], it could be seen as an attack on the people not just the poppy crops. That is a dangerous road to take," says Gen. Mohammed Daud, Head of the Anti-Narcotics Department at the Ministry of Interior.

(M)y objection to the term "fair trade" goes deeper. It is a weasel term that can be twisted to mean whatever we want it to mean. In the United States fair trade usually means resale price maintenance. I first came across the expression in the British context in relation to the late 19th century political leader, Joseph Chamberlain, who was a Conservative imperialist. He was a great exponent of "fair trade"’ which he promoted in the form of an autarkic British Empire. William Gladstone, who was by far the greater statesmen, remarked in 1881: "Fair trade bears a suspicious likeness to our old friend protection. Protection was dead and buried 30 years ago, but he has come out of the grave and is walking around in the broad light of day. But after long experience underground, he endeavours to look more attractive than he used to appear... and in consequence he found it convenient to assume a new name." Today when I see a supermarket product branded as "fair trade", I wonder whether it merely means that the company producing it is law abiding and observing general accepted conventions. Or whether it means it refuses to trade with businesses using cheap labour in emerging countries. Here is an all too frequent example of those who shout loudest about helping the poor actually harming them. No one likes cheap labour, least of all well fed journalists or policy analysts. But it is nevertheless the main advantage that some poor countries have to offer on the world market and is a stepping stone to better living standards.

A question asked by many contributors to this volume is why it is so difficult to mobilise mass support for free trade. Hilary Benn notes the effects of the Corn Laws on the price of bread, which helped to sweep away Protection in the 1840s. The threat of a dearer breakfast basket saw the defeat of the Conservatives Party by the free trade Liberals in 1906. Yet just as outrageous is the effect on the cost of food (roughly £600 pa for a family of four) imposed by the Common Agricultural Policy. Why does this not lead to similar anger? My own suggestion is that the reformers in the main British political parties and elsewhere, see the way forward, like Hilary Benn today, as a series of "further changes in the CAP." The same applies to trade policy in general. The detail of tit-for-tat WTO-and EU- type negotiations is mind numbingly boring even for economic journalists who specialise in other matters, let alone for the general public. If the British government had made a bold proposals for abolishing the whole CAP in the negotiations on the European Constitution, there would at least have been a lively debate. In return it might have had to offer more concessions on other items such as majority voting on a broader range of issues, which will in any case be necessary as the EU expands. The free trade movement has lost a great deal by becoming too associated with trade negotiations best left to specialists and not brought in to the broader debate about the merits and defects of a free market economy. Of course there are such things as market failures explained in every textbook. But these do not become better or worse because of the intervention of national frontiers. The protectionists have gained a lot of ground because they have becoming associated with hostility towards large international corporations. We do not have to pretend that these institutions are especially lovable. Personally I hate both government and corporate bureaucracy. Such corporations serve the public interest, national and international, mainly because they are forced to compete. The debate should centre on the extent of competition and the contestability of markets rather than the likability of the organisations I am not going to argue against a gradual and sequenced approach by some of the poorest countries to reducing import barriers. But the more quickly and thoroughly they can open their economies the more rapidly they are likely to prosper; and in OECD countries the barriers and subsidies should come down tomorrow.