How the Rich Rule

The state is indeed the executive committee of the ruling class

By SHELDON RICHMAN

ERNEST HEMINGWAY: I am getting to know the rich.

MARY COLUM: I think you’ll find the only difference between the rich and other people is that the rich have more money.

Irish literary critic Mary Colum was mistaken. Greater net worth is not the only way the rich differ from the rest of us—at least not in a corporatist economy. More important is influence and access to power, the ability to subordinate regular people to larger-than-human-scale organizations, political and corporate, beyond their control.

To be sure, money can buy that access, but only in certain institutional settings. In a society where state and economy were separate (assuming that’s even conceptually possible), or better yet in a stateless society, wealth would not pose the sort of threat it poses in our corporatist (as opposed to a decentralized free-market) system.

Adam Smith famously wrote in The Wealth of Nations that “[p]eople of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Much less famously, he continued: “It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”

The fact is, in the corporate state government indeed facilitates “conspiracies” against the public that could not otherwise take place. What’s more, because of this facilitation, it is reasonable to think the disparity in incomes that naturally arises by virtue of differences among human beings is dramatically exaggerated. We can identify several sources of this unnatural wealth accumulation.

The Court Predator

Being a contemporary celebrity in an infantilized culture was the perfect cover

By mark steyn

Jimmy Savile is entirely unknown to Americans. Which is as it should be. He was a British disc jockey and children's-TV host, but, even by the debased standards of those callings, he didn't appear to have any particular talent. Yet, for half a century, until his death a year ago, he was one of the BBC's biggest stars: He hosted the first edition of Top of the Pops on TV in 1964, and he was there for the last in 2006. He had no discernible interest in pop music, but for millions of Britons his radio show was the accompaniment to roast-beef-and-Yorkshire-pud every Sunday lunchtime. He had, it was widely reported, an active dislike of children, but his Jim'll Fix It was a fixture on the telly for two decades. And throughout this time he was also a serial pedophile, as his many fans belatedly discovered only last month.

In American terms, he was a combination of Dick Clark, Mr. Rogers, and Jerry Lewis in telethon mode. But that doesn't quite do justice to the freakishness of his personality and its equally bizarre indulgence by Britain's establishment. The other day, while researching a bit of post-Thatcher Brit trivia, I chanced upon this sentence from the wife of the former prime minister John Major, which could stand for a thousand similar asides in a thousand political memoirs: "We had been shown around the Spinal Injuries Unit by its most celebrated and dedicated fundraiser, Sir James (Jimmy) Savile wearing an unforgettable gold lamé tracksuit."

Off with Their Heads

Has Vladimir Putin lost control of his “corruption crackdown”?

BY SIMON SHUSTER

Over the past month, a surreal new element has come to dominate Russia's nightly news. At times it feels like some sort of hybrid reality show, as if the Kremlin's propaganda men have started splicing episodes of MTV Cribs with episodes of COPS. The entrancing new genre was born from the purge that President Vladimir Putin launched in October -- the first anti-corruption campaign he has ever attempted -- and it has made for excellent television.

Viewers have been treated to commando raids on posh apartments, seized boxes of diamonds and gold, stacks of bribe money being fed by police into counting machines that look about ready to burst. Perhaps most satisfying of all, for the millions of workaday Russians watching at home, has been the sight of once-mighty bureaucrats groveling for sympathy, clemency, or bail. That schadenfreude is part of the point. Purges are meant to be popular.

But six weeks into this one, its initiator has found himself in the bind of his career. By allowing state TV to cover all the gory details of the bureaucratic bloodletting, Putin's government seems to have only reminded Russians just how shameless and pervasive corruption has become. In one case, police claim to have found an obscure military bureaucrat, Alexander Yelkin, in possession of around $9 million in cash and four Breguet watches. Had he not been arrested on Nov. 16, he was reportedlyplanning tocelebrate his birthday the following night with a private concert by Jennifer Lopez. Judging by the latest polls, such tales of profligacy have begun to reflect badly on the entire government -- Putin included. But satisfying the public's piqued desire for justice is hardly an option at this point. Bureaucrats at every level are already spooked by the spate of arrests, and if the lifestyle to which they have become accustomed becomes threatened, they could start to turn on Putin. And that raises the risk of a palace coup.

"He has to strike a very delicate balance," says Alexander Rahr, a member of the Valdai Club, a forum of Russia experts that meets with Putin once a year. "He is too dependent on the boyars [feudal lords] to go chopping off their heads, but that is what the people are now demanding."

The Debtor Prisoner’s Dilemma

Those who cannot forget the past are condemned to inflate it

By Harold James

Any economic slowdown increases debt burdens, whether for households or for states. Today, both are looking for ways to reduce the weight of debt – and some would prefer to escape it.

Deeply frustrated and angry people – especially in southern Europe – frequently hold up Argentina’s defiance of the international community in 2001 as a model. Argentina then used a mixture of coercion and negotiation to get out from under the mountain of debt that it incurred in the 1990’s, effectively expropriating foreign creditors, who were viewed as dangerous and malign.

In the 1990’s, Argentina tied its hands with a dollar-pegged currency in order to enhance its credibility as a borrower. The strategy worked too well: the large credit inflows that it attracted triggered an inflationary boom that reduced the country’s competitiveness. By 2001, a combination of devaluation (exit from the currency straitjacket) and partial default was inevitable. Default was followed by nominally voluntary restructurings in which creditors were invited to take some losses.

Up to now, the Argentine model has seemed successful, yielding substantial economic growth for the country since 2001. That is what has made the model so appealing to debt-burdened southern Europeans.

But a recent New York court ruling against Argentina in a case brought by a holdout hedge-fund creditor has dramatically raised the stakes of sovereign default and bankruptcy. When holdouts are rewarded by court decisions, and the rights of recalcitrant creditors are recognized in other jurisdictions, efforts at “voluntary” restructuring become unsustainable. More and more parties will resist writing down some debt in favor of trying to seize whatever assets they can.

For Argentina, the writing is now on the wall.

Kill the human rights commissions

Before they kill our freedoms

By George Jonas

Canada’s commissars for “human rights” are making the front pages again, this time by offering to balance “conflicting human rights.” At least, that’s what they’re selling, and some headline writers are buying it.

The National Post headline that went with Sarah Boesveld’s report last Saturday, for instance, read: “Gender vs. religion: Woman refused haircut by Muslim barber highlights problem of colliding rights.”

No, it doesn’t, actually. What it highlights is the coercive state’s ongoing attempt to deny the human rights it constitutionally guarantees, if they conflict with human ambitions it promotes or protects: In this instance, some matriarchal quest to empower women to have their hair cut by men of their choice, whether they like it or not.

The case itself is too silly for words. Unless there’s an Alice-in-Wonderland edition, the Charter’s guarantee of gender equality doesn’t authorize women to conscript barbers as their hairdressers. For barbers who refuse, invoking religion is, to put it mildly, overkill. “Sorry, I don’t do ladies’ hair” is all that need be said by anyone who finds it more congenial or lucrative to shave male customers.

For matriarchy’s martinets, however, hauling a citizen into an office on a frivolous complaint is all in a day’s work. Even if it goes no further, for the state to compel attendance in a matter so far beyond its competence — hair salons aren’t unisex by law, are they? — is scandalous. It calls for an apology and full restitution of the barber’s legal expenses.

It also calls for questions in the legislature.

There may not always be an England

John Bull was once a canny and tough old fellow

BY J.E. DYER

Q.  When does the British government subsidize a TV channel that carries the rants of anti-gay religious fanatics?

A.  When the TV channel is run by Islamist extremists.

OK, that one was a softball.  But it’s worth pointing out a telling contrast in the British government’s stance on people’s right to think unapproved thoughts about homosexuality.

Here is what Mr. Abdullah Hakim Quick, a speaker who has been featured on Britain’s Ramadan TV, has to say about gays:

Abdullah Hakim Quick … has been condemned by New Zealand’s broadcasting authority for his anti-gay tirades, which state that homosexuals must be killed, that they are “sick” and “not natural”, and that “Muslims are going to have to take a stand [against homosexuals] and it’s not enough to call names.” He continues to hold this position: “They said ‘what is the Islamic position [on homosexuality]?’ And I told them. Put my name in the paper. The punishment is death. And I’m not going to change this religion.”

The National Health Service’s North East London & the City agency responded to this editorial posture by subsidizing Ramadan TV to the tune of £3,200.  Sam Westrop at the Gatestone Institute (first link) gives other examples of bloodthirsty extremism from the talking heads on Ramadan TV.  Homosexuality, however, is the topic that highlights the unequal treatment now being accorded to citizens of the UK.

'Europe Hasn't Learned Lessons from Greece Crisis'

A debt cut is necessary, and not just for Greece

For the third time, European finance ministers this week have put together a package of aid measures for Greece and assured Europeans that the country is now back on track to financial health. But is it really? German commentators certainly don't think so.

By Spiegel

Hedge fund managers, at least, are pleased. The deal struck late on Monday night between euro-zone finance ministers and the International Monetary Fund to reduce Greece's overall debt load includes a measure stipulating an Athens buyback of its own debt. Investors that bought Greek bonds for as low as 17 cents on the euro can now expect to sell them back to Athens for around 35 cents on the euro -- a tidy little profit.

Elsewhere, however, investors would appear to be unimpressed by the deal. Markets across the world were down on Wednesday and the euro lost value early against the dollar, with Greece cited -- along with US debt troubles -- as one of the reasons for the uncertainty. Investors, it would seem, see the Greece deal as yet another attempt by European leaders to muddle through the crisis rather than take steps toward a lasting solution.

"There remains the potential for this deal to fall apart in the medium term as there are a lot of moving parts and it is a long way away from the permanent fix that the IMF had been insisting upon," Gary Jenkins, managing director of Swordfish Research, which focuses on international bond markets, told the Associated Press. "It is just one more big kick of the can down the road."

There's a Hole in the Budget...

What the Greece Deal Means for German Finances

Finance Minister Wolfgang Schäuble insisted on Tuesday that the new deal aimed at slashing Greece's debt load won't cost German taxpayers. It will, however, deny Germany billions in expected revenues. And the feared debt cut may be just around a not-too-distant corner.

By Spiegel

German Finance Minister Wolfgang Schäuble is a clever orator. In comments to the press on Tuesday, he first made sure to praise Greek reform efforts before turning to the most recent measures passed to prop up the heavily indebted country. Then he said that the new aid package, aimed at reducing Greece's overall debt load and giving the country two extra years to meet its budget deficit reduction targets, won't cost German taxpayers a penny.

It is a bold statement. And one that leaves plenty of room for interpretation. Particularly given Schäuble's follow up. Berlin, he said, will suffer a "reduction of revenues."

It is a typical Schäuble formulation: a bit ambiguous and slightly misleading. But the numbers are clear enough. Germany will forego some €730 million ($944 million) in revenues in 2013 as part of the deal hashed out on Monday night in Brussels between euro-zone finance ministers and the International Monetary Fund. It is a compromise that avoids, for now, the kind of debt haircut that Berlin had been so opposed to. But it marks the first time that the crisis in Greece will have a direct effect on the German budget.

China Doesn't Own the U.S., Japan Does

Why China May No Longer Be America’s No. 1 Debt Buyer

As Beijing rejiggers its economic strategy and lets its currency weaken, Japan is likely about to become to the top foreign holder of U.S. Treasuries. What does this mean?

by Daniel Gross  

You hear it all of the time. The problem is that the government is borrowing from China to fund our stupid spending programs, or popular subsidies, or tax cuts. Mitt Romney (remember him?), in a presidential debate, defined his criterion for deciding whether spending is worthwhile thusly: “Is the program so critical it’s worth borrowing from China to pay for it?” Big Bird famously didn’t meet that test. In the vice-presidential debate, Paul Ryan criticized subsidies for electric cars, and wondered“Was it a good idea to borrow all this money from countries like China and spend it on all these various different interest groups?” Democrats do it, too. Pollster Mark Mellman, writing in The Hill, described how he used the “borrowing from China” line in a recent poll.

Subtle, this isn’t. Politicians of all stripes warn that it’s a bad idea for Americans to borrow from a rival, a potential enemy, a country with a fundamentally different and authoritarian political system. Relying on China as a lender will reduce our freedom of movement, harm our values, and diminish the country. And in recent years, our massive trade deficit has led to ever-increasing Chinese purchases of U.S. government debt. For much of the past two decades, China’s central bank has hoovered up all the dollars we sent to purchase plastic stuff and clothes, and then used it to buy dollar-denominated assets, the better to keep its currency weak against the dollar. A year ago, China was far and away the largest foreign owner of U.S. debt; it sat on a $1.27 trillion stockpile.

But the global economy is a dynamic place. Things change. And today, it’s highly likely that the biggest foreign holder of U.S. debt isn’t the snarling Asian tiger of China. Rather, it’s the wounded, unthreatening kitty cat of Japan.

Why a Falling Birth Rate Is a Big Problem

A few more babies would be good for business

By RICK NEWMAN

It sounds like one of those stories you can safely ignore: The U.S. birth rate has hit a record low, led by a big drop in the portion of immigrant women having babies.

This development doesn't directly affect anybody, since it's one of those long-term societal trends that occurs in small increments and doesn't change the unemployment rate, the price of gas, the direction of the stock market or any of the big economic forces that make our lives better or worse today. And since the trend is strongest among immigrants, it sounds like maybe this is something happening in a shadowy part of the economy that doesn't matter all that much.

But it does matter, and if the trend persists, it could mean lower living standards for most Americans in the future.

It may seem intuitively obvious that a slower-growing or declining population is good for the economy, especially when you think about starving children in poor parts of the world where there's not enough food for everybody. In places where resources are severely limited—and economic policies are dysfunctional—it may be true that a growing population is a bad thing.

But that's usually because such economies are static, and instead of creating wealth they typically just divide up what's already there. That's not the situation in America, which has a dynamic economy that creates wealth and more than enough resources for all of its citizens.

Mubarak may be gone, but his economic policies still haunt Egyptians.

Egypt's Economy: The Downside to Growth

BY MAGDA KANDIL

The Egyptian republic's economic course has been problematic, to say the least. Gamal Abdul Nasser's experiment with nationalization, central planning and Soviet-assisted industrialization left the economy hobbled by regulation and inefficiency. Anwar Sadat's successor regime relaxed the government's grip, but accumulated a mountain of foreign debt that caused stagnation through much of the 1980s.

But fortune favored the economy thereafter. Much of Egypt's external debt was forgiven or restructured in the wake of the Gulf War. And in the decade that followed, per capita GDP calculated in terms of purchasing power rose by one-third simply on the strength of containing both inflation and budget deficits.

Mubarak subsequently introduced major market-based reforms -- steps toward privatization and deregulation -- that permitted growth to accelerate to the 7 percent range. His technocrats also negotiated the global recession without a tumble, responding with a domestic stimulus (mostly infrastructure investment) that largely offset declines in private investment and exports. In the two years prior to the Arab Spring, the economy seemed to be back on the rapid development track.

However, in the years of high growth, though unemployment in the formal market rarely fell below 9 percent, youth unemployment hovered around 25 percent, and increasing numbers of college graduates never managed to get a first job. Moreover, the stimulus barely touched smaller enterprises, reinforcing the popular impression that the game was rigged in favor of insiders.

The revolution and lingering uncertainty during the transition exacted a huge toll on economic performance. The economy has since been creeping back, but at a pace hopelessly short of the 7 percent pace needed to absorb new entrants to the labor force.  And the prospects for acceleration are mixed.

Egypt's Theocratic Future

The Constitutional Crisis and U.S. Policy

By Robert Satloff and Eric Trager

Egypt's newly drafted constitution, which will be put to a referendum on December 15, represents a tremendous step backward for the country's democratic prospects. President Muhammad Morsi's decision to rush the document through a constitution-writing assembly that non-Islamists abandoned, coupled with the many articles that Islamists in power can easily exploit, virtually ensures a theocratic Egyptian future. The charter also cements the Muslim Brotherhood's deal with the military, granting the generals relative autonomy in exchange for accommodating the Brotherhood's political ambitions.

BACKGROUND

Egypt's Constituent Assembly has faced two key challenges since the Brotherhood-controlled parliament appointed it to draft the new constitution in June. First, its domination by Islamists upset its non-Islamist members, and by mid-November almost all of the latter had abandoned the assembly in protest. Second, following the Supreme Constitutional Court's mid-June ruling that parliament had been elected unconstitutionally, the assembly became a target for litigation. After multiple postponements, a ruling on its legality was expected this week.

To preempt this ruling, however, Morsi issued a November 22 constitutional declaration that, in addition to asserting virtually unchecked power for himself, insulated the assembly from being dissolved by the court. When non-Islamists launched mass protests against the decree, Morsi responded by calling for completion of a draft constitution within twenty-four hours; the assembly in turn replaced many of the non-Islamists who had abandoned it with Islamists. On Saturday, Morsi approved the resulting draft and called for a national referendum on December 15. It is widely expected to pass: Islamists (who remain the country's best-mobilized political forces) support it, and "yes" has won every plebiscite in contemporary Egyptian history.

The Great Irish Famine

A recipe for eventual catastrophe on a terrible scale

by STEPHEN DAVIES

History is a subject that often arouses strong emotions. What seems to some people to be a topic of limited academic interest is for others the source of deeply held and passionate feelings. The task of the historian is to try to establish, as dispassionately as possible, what actually happened in a given time and place and to give an explanatory account of why and how what happened came to pass.

It is at this point that the trouble starts since this inevitably involves an evaluative judgment, which can be controversial. It is nowadays fashionable in some circles to assert that the idea of honest or true historical accounts is a delusion, that all historical narratives are driven by an agenda and should be seen as mythical or quasi-fictional. This view is persuasive insofar as many widely accepted historical narratives are of this kind and are constructed with an eye to having an effect in the present rather than explaining the past. This does not mean, however, that historical scholarship as traditionally understood is impossible, merely that it is difficult. The study of history can actually undermine popularly accepted views of the past and reveal that, in Artemus Ward’s expression, much of what people know “just ain’t so.”

The history of Ireland is a case in point. Until recently Irish history was dominated by an account of how the Irish resisted, and eventually threw off, the oppressive rule of the English and their collaborators. Recently this has been questioned by a new generation of Irish historians and a new, more nuanced picture has appeared.¹ This has led to a deeper understanding and has meant that we now draw very different conclusions and lessons from the past.

The classic example of this is the Irish Potato Famine of the 1840s. The basic facts of the event, one of the most tragic in modern British history, are not in question. In 1845 the Irish potato crop became infested with a fungal parasite (Phytophthora infestans), causing a partial failure of the crop that year.

Eyeless in Gaza

A two-state solution of Israel and Palestine in peaceful co-existence in still a long-term goal

By Jayantha Dhanapala 
UNITED NATIONS - Mahatma Gandhi said it with remarkable moral clarity - "An eye for an eye only ends up making the whole world blind." That is indeed what happened in Gaza over eight days in November, with an estimated 160 Palestinians and six Israelis dead in the latest exchange of rockets and drones brought to an uneasy end by an Egyptian-brokered ceasefire. 
The recently re-elected US President Barack Obama's support for Israel was assured for the cynical exercise engineered by Israeli Prime Minister Benjamin Netanyahu in order to ensure his victory at the elections in January next year. 
It is widely speculated that this was Obama's quid pro quo for Netanyahu pulling back from his reckless intervention in the US presidential campaign on the side of Republican challenger Mitt Romney. For good measure, Obama has unilaterally announced that the Helsinki Conference scheduled for December this year to discuss the proposed Middle East Weapons of Mass Destruction Free Zone (MEWMDFZ) will not take place. 
This in spite of the fact that the responsibility of convening the conference was entrusted by the parties to the Treaty for the Nonproliferation of Nuclear Weapons (NPT) to the US, UK, Russia and the UN secretary-general in pursuance of which the facilitator from Finland had worked tirelessly. 
In 1936, Aldous Huxley published a novel, Eyeless in Gaza, with the title drawn from the Biblical story of Samson blinded by the Philistines and put to work in Gaza, and relating the story of a man whose passage in life leads to pacifism. 
A peaceful settlement of the blockade of Gaza by Israel and an end to the scandalous conditions of its 1.7 million citizens is still very far away. However, the vote of the UN General Assembly on the upgrading of Palestine as an Observer State of the UN on November 29 is some solace to a brutally repressed people notwithstanding the acute rivalry between Hamas who control the Gaza and the Fatah, who heads the Palestine National Authority. 

Is There an Egyptian Nation?

The current protests aren't about the President Mohamed Morsi's power grab -- this fight is over something far more basic

BY SHADI HAMID

In the latest round of Egypt's current crisis -- once again pitting Islamists against non-Islamists -- demonstrators gathered at the presidential palace in Cairo to protest President Mohamed Morsi's stunning decision to claim authoritarian, albeit temporary powers and his subsequent moves to rush through a controversial constitution. In a grim reminder of the country's precarious state, police clashed with protesters and fired tear gas.

But this isn't really about Morsi and his surprise decree -- though to be sure, parts of the decree employ language straight out of Orwell and seem almost designed to provoke and polarize. However, neither the decree nor the draft constitution are quite as bad as Morsi's opponents insisted. The opposition's sometimes bizarre comparisons to Adolf Hitler, Benito Mussolini, the 1933 Enabling Act, and the French Revolution suggest a legitimate fury (and an intriguing fascination with fascism), but make little sense as historic analogies.

Morsi could have read his Friday shopping list on national television, and it might have made little difference. The decree, after all, was only the latest in what Morsi's opponents see as a long list of abuses. Egypt's "original" revolutionaries are one such group that blast the Brotherhood's compromises small and large with the old state bureaucracy, lamenting how their revolution was sacrificed on the altar of expediency and gradualism. And it is true that the Brotherhood-appointed leaders of the Ministry of the Interior, the military, and the intelligence apparatus include men who were complicit in some of the worst human rights abuses of the Hosni Mubarak era -- and have gone unpunished to this day.

But these mostly younger revolutionaries, whose critiques have been admirably consistent, are a small minority. The rest of the opposition is an odd assortment of liberals, socialists, old regime nostalgists, and ordinary, angry Egyptians, each whom have their own disparate grievances and objectives. The liberals and leftists in the equation, led by figures such as Mohamed ElBaradei, Hamdeen Sabbahi, and Amr Moussa, have little in common with each other -- besides a fear that their country is being taken over, and taken away, by Islamists. While they may be "liberal," in the sense of opposing state interference in private morality, their attachment to democracy is mercurial at best. Many of them welcomed the dissolution of Egypt's first democratically elected parliament, called on the military to intervene and "safeguard" the civil state, and even cast their presidential ballot for Ahmed Shafiq, Morsi's opponent and Mubarak's last prime minister.

British Press Report Brings Out the Speech Nannies

A free press holds a mirror up to society, and rather often we don’t like what it reveals

By WALTER RUSSELL MEAD

The British press stinks, or at least a lot of it does. Sleazy tabloids run wild with reporters hacking cell phones, getting stories under false pretenses and hounding relatives of soccer stars and other pop idols within an inch of their lives. Ghoulish over reporting of personal tragedies like missing children wreak havoc and ruin lives. Laws get broken, people get hurt. After revelations that reporters and editors at one of Britain’s biggest tabloids had gone even further than that, a typically British response was to convene a panel of the Great and Good to decide what to do.

The Leveson Report, released Thursday, is the result of a lengthy inquiry into the British press and urges “the establishment of a new system of press regulation that would be backed by parliamentary statute.” For a look at its key recommendations as summarized by the Guardian, go here.

The British left is screaming for parliamentary regulation of the press. Prime Minister Cameron says this would “cross the Rubicon”: let the politicians start regulating the press and the Ministry of Truth is not far away. He is basically right; while the Leveson report doesn’t call for censorship of content, it introduces the idea that an outside regulator (theoretically independent of government) should regulate the conduct of reporters. Such bodies accrete power over time; once the camel gets its nose in the tent, the takeover process begins.

Britain is particularly susceptible to the disease of controlling unpleasant speech. Mixed with its long and proud tradition as an upholder of liberty, Britain has always had a weakness for letting the Great and the Good dictate to the rest of society. It has an Established Church, and for centuries people who didn’t belong to it were banned from holding office or attending universities. Britain was traditionally much more puritanical than, say, France when it came to censoring books, plays and later films.

Flawed views on peak oil rear their ugly heads again

Crying wolf. Again

By Robin Mills

The debate over peak oil is stalked by zombie ideas that live on, no matter how many times they are stamped upon. The latest significant article warning of declining oil supplies manages to revive not just one but at least six of these false concepts.

An article by the oceanographer James Murray and the former UK chief scientific adviser David King appears in the prestigious journal Nature.

It argues that conventional oil production has been stagnant since 2005 and that "the oil market has tipped into a new state … production is now … unable to respond to rising demand".

The idea that oil production has not risen above 74 million barrels per day (bpd) since 2005 relies on a very narrow definition of "crude oil". In reality, oil demand is now met from a range of sources, including biofuels and petroleum extracted from natural gas.

To the motorist, the end product is indistinguishable. Figures from the US Energy Information Administrationsuggest that, for the first time, total production topped 90 million bpd at the end of last year.

Automatically ascribing a slowdown in production growth to physical resource constraints fails to consider the economic and policy context.

How lives are transformed amid civilization’s rubble

Behind the Iron Curtain  

By Anne Applebaum

Many people have tried to describe what it feels like to endure the disintegration of one’s entire civilization, to watch the buildings and landscapes of one’s childhood collapse, to understand that the moral world of one’s parents and teachers no longer exists and that one’s respected national leaders have failed. Yet it is still not an easy thing to understand for those who have not experienced it. Words like “vacuum” and “emptiness” when used about a national catastrophe such as an alien occupation are simply insufficient: They cannot convey the anger people felt at their prewar and wartime leaders, their failed political systems, their own “naive” patriotism and the wishful thinking of their parents and teachers. Different parts of Eastern Europe experienced this collapse at different times. But whenever and however it came, national failure had profound effects, especially on young people, many of whom simply concluded that everything they had once thought true was false.

Certainly that was what happened to Tadeusz Konwicki, a Polish novelist who spent the war as a partisan. Brought up in a patriotic family near Vilnius, in what was then eastern Poland, Konwicki eagerly joined the armed wing of the Polish Resistance, the Home Army, during the war. First he fought the Nazis. Then, for a time, his unit fought the Red Army. At some point their struggle began to deteriorate into armed robberies and gratuitous violence, and he found himself wondering why he was still fighting. Eventually he left the forests and moved to Poland, a state whose new borders no longer included his family home. Upon arrival, he realized that he had nothing. At age 19, he was in possession of a coat, a small backpack, and a handful of fake documents. He had no family, no friends, and no higher education.

Is Austerity, Shrinking Wages, and Firing of Public Workers a Bad Thing?

Latvia's Real-Time Experience

By Mike "Mish" Shedlock

The socialists and the Keynesians would have you believe that austerity is a bad thing, and that firing government workers when unemployment is already high is the wrong thing to do.
Anyone believing those myths needs to consider Euro Countries (and the IMF) Can Learn from Latvia’s Economic Success.

 In 2008–09, Latvia lost 24 percent of its GDP. It was heading toward a budget deficit of 19 percent of GDP in 2009 without a program of radical austerity.
A new Latvian government came to power in March 2009, when GDP was in free fall. It told people how bad the situation was, and the various social partners responded by signing up to a truly radical austerity program. One-third of the civil servants were laid off; half the state agencies were closed, which prompted deregulation; the average public wage was cut by 26 percent in one year. But this was a socially considerate program. Top officials were hit more, with 35 percent in wage cuts, while in the end pensions were not cut. In particular, public servants were no longer allowed to sit on state corporate boards and earn more than from their salaries, a malpractice that is still common in many European countries. The government exposed high-level corruption. Yet, many schools and most of the hospitals were closed.

Doha: It’s Not the end of the world as we know it

That's Good

by Rob Lyons 

It’s like a fly banging its head against a window pane, desperately trying to get to the other side and uncomprehending as to why it never succeeds. Except this is a 17,000-strong swarm of flies taking part in its annual exercise in futility. Yes, there’s another UN climate conference going on, though you might well have missed it.

The eighteenth Conference of the Parties to the UN Framework Convention on Climate Change - there’s a good reason they call it COP18 - is taking place in Doha, the capital of Qatar. The small Arab state is, by some measures, the richest country in the world per head of population, a position built on the fact that it has the third-largest reserves of natural gas in the world. The conference has been running since 26 November and is due to end on Friday. But no one is predicting any kind of dramatic deal.

Which is a bit of a problem for those who run this peculiar show because another thing that ends soon is the Kyoto Protocol. Signed 15 years ago in Japan, the protocol aimed to reduce greenhouse gas emissions in 37 industrialised countries and the EU to a level five per cent below 1990 levels for the period from 2008 to 2012. There’s no sign of a replacement - which, to be meaningful, really needs to include big developing countries like China, India and Brazil - just endless talks about talks. At last year’s event - COP17 in Durban, South Africa - there was an agreement to negotiate a ‘protocol, legal instrument, or an agreed outcome with legal force applicable to all Parties’ by 2015, to take effect by 2020. As a Greenpeace representative bemoaned then: ‘Right now the global climate regime amounts to nothing more than a voluntary deal that’s put off for a decade.’

Why Finnish school lessons are useless

Finland may be at the top of the world’s education rankings, but that tells us more about Finnish society than its schools

by Eero Iloniemi 

Finland has once again topped an international education ranking table.

This time, the British education firm Pearson has rated Finland the world leader in education. The country has also traditionally had a strong showing in the OECD’s PISA rankings, so it must be doing something right, right? This success has even spawned a cottage industry dedicated to the so-called Finnish education miracle. One example of this is the book Finnish Lessons: What the World Can Learn From Educational Change in Finland? The book has been a bestseller (well, in the education section of the bookshop, anyway).

In the most recent education table, Britain did not do too badly, coming in at sixth. But what is it about Finland that makes its education system so table-rankingly excellent? It’s certainly not money. Spending on education in Finland is no higher than the OECD average.

Pearson itself explains Finland’s success by factors that are fairly difficult to quantify such as a pro-education culture and the quality of teachers. But other more easily verifiable factors also come into play although most are omitted by many educational experts.

For a start, given that South Korea (alongside Finland) has again finished in the top two, following its first place in the PISA rankings, it’s worth asking what the two countries have in common?

At first glance, not much it would seem. Koreans emphasise testing, discipline, homework and long school days. Finnish kids have one of the shortest school days in the world, are seldom tested, have little homework and address their teachers by their first name from their first day at school.

Yet closer examination shows similarities that are not revealed in the education studies.

Fedophilia

It's curable

by George Selgin

Although the movement to “End the Fed” has a considerable popular following, only a very tiny number of economists—our illustrious contributors amongst them—take the possibility seriously. For the rest, the Federal Reserve System is, not an ideal currency system to be sure (for who would dare to call it that?), but, implicitly at least, the best of all possible systems. And while there’s no shortage of proposals for reforming it almost all of them call only for mere tinkering. Tough though their love may be, the fact remains that most economists are stuck on the Fed.

This veneration of the Fed has long struck me as perverse. Its record can hardly be said, after all, to supply grounds for complacency, much less for the belief that no other system could possibly do better. (Indeed that record, as Bill Lastrapes, Larry White and I have shown, even makes it difficult to claim that the Fed has improved upon the evidently flawed National Currency system it replaced.) Further, as the Fed is both a monopoly and a central planning agency, one would expect economists’ general opposition to monopolies and to central planning, as informed by their welfare theorems and by the general collapse of socialism, to prejudice them against it. Yet instead of ganging up to look into market-based alternatives to the Fed, the profession for the most part has relegated such inquiries to its fringe.

Why? The question warrants an answer from those of us who insist that exploring alternatives to the Fed is worthwhile, if only to counter people’s natural but nevertheless mistaken inclination to assume that the rest of the profession isn’t interested in such alternatives because it has already carefully considered—and rejected—them.

Orderly and Humane?

An Endless Nightmare

By Peter Hitchens

Some time ago I decided to write a book about the damaging and deluded cult of national victory which has done this country so much damage since 1945. No doubt it will receive the usual mixture of abuse and  silence which most of my books receive. But I shall write it anyway, as it seems to me to be a truth urgently in need of being expressed, especially as we shall soon be marking the 70^th anniversary of the end of the supposedly ‘Good’ Second World War. It is now possible to have more-or-less grown-up attitudes towards the First World War, whose last remaining justification – that it was ‘The War to End All Wars’ - crumbled into dust and spiders’ webs in September 1939. But the 1939-45 conflict is still wreathed in delusions, delusions often employed to try to justify modern wars which are alleged to have comparably ‘good’ aims.

The belief in its goodness is in fact ludicrous. Our main ally (rejected at the beginning with lofty scorn, embraced later with desperate, insincere enthusiasm) was one of the most murderous tyrants in human history, whose slave empire we helped him to extend and consolidate, and to whom we afterwards handed thousands of victims, to whom we owed at least a life, though we knew he would murder them.

Our purpose in joining the war was not only not achieved, but the country whose independence we claimed to be ‘saving’ sank under successive waves of horror, cruelty, lawlessness, murder and despotism, to emerge 60 years later and many miles from where it had been when we ‘rescued’ it.

Dancing Around Genocide

At Human Rights Watch, a bitter behind-the-scenes battle over Iran's calls to annihilate Israel

By DAVID FEITH

Is promoting genocide a human-rights violation? You might think that's an easy question. But it isn't at Human Rights Watch, where a bitter debate is raging over how to describe Iran's calls for the destruction of Israel. The infighting reveals a peculiar standard regarding dictatorships and human rights and especially the Jewish state.

Human Rights Watch is the George Soros-funded operation that has outsize influence in governments, newsrooms and classrooms world-wide. Some at the nonprofit want to denounce Iran's regime for inciting genocide. "Sitting still while Iran claims a 'justification to kill all Jews and annihilate Israel' . . . is a position unworthy of our great organization," Sid Sheinberg, the group's vice chairman, wrote to colleagues in a recent email.

But Executive Director Kenneth Roth, who runs the nonprofit, strenuously disagrees.

Asked in 2010 about Iranian President Mahmoud Ahmadinejad's statement that Israel "must be wiped off the map," Mr. Roth suggested that the Iranian president has been misunderstood. "There was a real question as to whether he actually said that," Mr. Roth told The New Republic, because the Persian language lacks an idiom for wiping off the map. Then again, Mr. Ahmadinejad's own English-language website translated his words that way, and the main alternative translation—"eliminated from the pages of history"—is no more benign. Nor is Mr. Ahmadinejad an outlier in the regime. Iran's top military officer declared earlier this year that "the Iranian nation is standing for its cause that is the full annihilation of Israel."