Seven, plus or minus two: or what the North Koreans do best

Foreign Policy is a terrific journal, but sometimes even it runs out of ideas for thought-provoking copy.

Take, for example, this morning’s little feature headlined “7 things the North Koreans are really good at”.

BTW, in case you’re interested, they are:

1. Building tunnels

Apparently, the Hermit Kingdom has constructed a massive network of clandestine tunnels underneath the so-called demilitarised zone (DMZ). “Designed as a means to mount a massive military invasion from the north, the tunnels are ‘large enough to shuttle through an entire military division per hour,’ according to Popular Mechanics. GlobalSecurity.org estimates that Pyongyang has built up to 20 tunnels that snake through the Demilitarized Zone.”

2. Counterfeiting US dollars. Foreign Affairs maintains that Kim Jong-Un & Co make the best fake dollars in the world.

3. Hacking (Really? In a country with no real Internet access.)

4. Doing more with less (i.e. absence of choice. Eric Schmidt told me that during his extended visit to North Korea, no public building he entered — except for his hotel — had any form of heating. It seems improbably that a state that cannot heat its buildings would be good at sophisticated software. But then again, they’ve built rockets and nukes.)

5. Cheap labour. (No surprise there.)

6. Massive co-ordinated propaganda displays. (Synchronized swimming was made for North Koreans.)

7. Seafood (Eh??

How to be interviewed

I love this exchange in the Paris Review‘s interview of Nabokov:

INTERVIEWER

Did you learn from your students at Cornell? Was the experience purely a financial one? Did teaching teach you anything valuable?

NABOKOV

My method of teaching precluded genuine contact with my students. At best, they regurgitated a few bits of my brain during examinations. Every lecture I delivered had been carefully, lovingly handwritten and typed out, and I leisurely read it out in class, sometimes stopping to rewrite a sentence and sometimes repeating a paragraph—a mnemonic prod which, however, seldom provoked any change in the rhythm of wrists taking it down. I welcomed the few shorthand experts in my audience, hoping they would communicate the information they stored to their less fortunate comrades. Vainly I tried to replace my appearances at the lectern by taped records to be played over the college radio. On the other hand, I deeply enjoyed the chuckle of appreciation in this or that warm spot of the lecture hall at this or that point of my lecture. My best reward comes from those former students of mine who, ten or fifteen years later, write to me to say that they now understand what I wanted of them when I taught them to visualize Emma Bovary’s mistranslated hairdo or the arrangement of rooms in the Samsa household or the two homosexuals in Anna Karenina. I do not know if I learned anything from teaching, but I know I amassed an invaluable amount of exciting information in analyzing a dozen novels for my students. My salary as you happen to know was not exactly a princely one.

Those analyses of novels (collected in his Lectures on Literature) are among my most prized possessions.

Can you imagine how he would have figured in Rate my Professors!

That Excel moment

As Tony Hirst points out, the fiasco of the Reinhard-Rogoff correlation that evaporated under student examination is a very good argument for open data in social science as well as in the exact sciences. But I don’t think that the full import of the screw-up has dawned on enough people. After all, our economies are being destroyed by governments who believe in the economic equivalent of fairies, and the Reinhard-Rogoff correlation (of public debt with low or zero economic growth) provided the only theoretical fig-leaf that they had. And now it’s been shown to be a transparent fig-leaf.

The Atlantic had a good go at exploring what this means:

Austerity has been a policy in search of a justification ever since it began in 2010. Back then, policymakers decided it was time for policy to go back to “normal” even though the economy hadn’t, because deficits just felt too big. The only thing they needed was a theory telling them why what they were doing made sense. Of course, this wasn’t easy when unemployment was still high, and interest rates couldn’t go any lower. Alberto Alesina and Silvia Ardagna took the first stab at it, arguing that reducing deficits would increase confidence and growth in the short-run. But this had the defect of being demonstrably untrue (in addition to being based off a naïve reading of the data). Countries that tried to aggressively cut their deficits amidst their slumps didn’t recover; they fell into even deeper slumps.

Enter Carmen Reinhart and Ken Rogoff. They gave austerity a new raison d’être by shifting the debate from the short-to-the-long-run. Reinhart and Rogoff acknowledged austerity would hurt today, but said it would help tomorrow — if it keeps governments from racking up debt of 90 percent of GDP, at which point growth supposedly slows dramatically. Now, this result was never more than just a correlation — slow growth more likely causes high debt than the reverse — but that didn’t stop policymakers from imputing totemic significance to it. That is, it became a “fact” that everybody who mattered knew was true.

Except that it wasn’t.

Austerity is back to being a policy without a justification. Not only that, but, as Paul Krugman points out, Reinhart and Rogoff’s spreadsheet misadventure has been a kind of the-austerians-have-no-clothes moment. It’s been enough that even some rather unusual suspects have turned against cutting deficits now. For one, Stanford professor John Taylor claims L’affaire Excel is why the G20, the birthplace of the global austerity movement in 2010, was more muted on fiscal targets recently.

Will this matter? Hard to say. My feeling is that British economic policy-making has been evidence-free for a long time. George Osborne & Co are driven by blind faith in nonsense, and immune to every kind of logic, including, apparently, the electoral variety. But Krugman thinks that the Excel foopah has opened a crack in their invincible ignoramce.

“My vague, unquantifiable sense”, he writes,

“is that the debacle is changing the conversation quite a lot, even among the guys in suits. And it was the coding error that did it.

Now, the truth is that the coding error isn’t the biggest story; in terms of the economics, the real point is that R-R’s results were never at all robust, both because the apparent relationship between debt and growth is fairly weak and because the correlation clearly goes at least partly the other way. But economists have been making these points for years, to no avail. It took the shock of an outright, embarrassing error to shake the faith of the Very Serious People in a result they really wanted to believe.

The point is that the next time Olli Rehn, or George Osborne, or Paul Ryan declares, sententiously, that we must have austerity because serious economists (i.e., not Krugman and friends) tell us that debt is a terrible thing, people in the audience will snicker — which they should have been doing all along, but now it has become socially acceptable.”

Yep. Sometimes laughter is the best riposte.

LATER: Sooner or later, we ought also to start sniggering whenever an economist enters the room. As a profession addicted to a pathological paradigm which wrecked the banking system, its practitioners have shown an astonishing lack of remorse about their failings. And it turns out that, having had their incompetence exposed, Reinhart and Rogoff have been displaying textbook disingenuousness, so it’s nice to see that they’re now being called out on that too.

Friedmania

Well, well. Not content with traversing the globe and dispatching uplifting epistles based on extensive conversations with heads of state and taxi-drivers, Tom Friedman will now have a conference all by himself. It’s called ‘The Next New World’ and for $995 you can have a whole day watching Tom “explore the complex dynamics of new-world infrastructure, especially the transformative electronic, digital and mobile environment,” impart “invaluable insights into strategies for success in today’s new world order,” and answer the question: “What World Are You Living In?”

Why does Friedman feel the need to start a conference of his own?

“It’s been a feeling of mine for a while”, he says in the introductory video, “that while we were sleeping, something really big happened over the next decade. That is, while we were focused on 9/11 and the subprime crisis, something really big happened in the plumbing of the world.”

[The plumbing btw is basically the internet.]

So what happened while we were sleeping (and therefore not reading the New York Times OpEd pages)? Well,

“The world went from connected to hyperconnected, from interconnected to interdependent, and my view is that this is changing every job, every workplace, every industry, every job. and we’re not talking about it. Yet we’re all living it and feeling it…If you don’t start every day asking, ‘What world am I living in?’ you’re going to get in a lot of trouble.”

Friedman proposes to answer these questions by chatting with a set of white men on subjects including “Threats or Possibilities,” “What Happened to Power?” “What You Don’t Know Is Coming,” and “What Energy Is Going to Be.” If that weren’t enough, the website promises the presence of droves of C-Suite executives, venture capitalists, “content providers,” “hardware manufacturers,” and “service providers.”

As the New Republic astutely points out, if you haven’t got $995, you can achieve much the same result from the wonderful Thomas Friedman OpEd Generator.

The new world order

Fascinating report in the Economist.

WHEN Stephen A. Schwarzman, chairman of Blackstone Group, a private-equity firm, announced in Beijing on Sunday the $300m Schwarzman Scholars programme to send students to China to study, it was a testament to China’s place in the world as a new centre of gravity. Its gravitational pull on corporate money is already fearsome: Behind Mr Schwarzman himself, a long list of companies and individuals with substantial business interests in China have lined up to contribute to the programme: Boeing, an airplane maker; Caterpillar, a maker of bulldozers and excavators; BP, an oil company; and several large banks.

Schwarzman Scholars will fund scholarships beginning in 2016 for 200 students a year from much of the world to attend classes at Beijing’s Tsinghua University, the alma mater of President Xi Jinping and of many other top leaders (Mr Xi sent a letter to the announcement ceremony). The scholarship is to fund the studies of 10,000 students over 50 years.

As the piece goes on to point out, this idea is modelled on the Rhodes Scholars scheme, which brought bright kids to Oxford at a time when Britain was seen as the centre of the world. How times change.

The ‘Gay Onslaught’

Wonderful speech by Maurice Williamson in the debate in the New Zealand parliament on the bill that would legalise same-sex marriages.

Wish more of our parliamentarians had the same sense of ironical style. I particularly like the bit about him roasting in hell for all eternity.

The Iron Milk Snatcher

In all the media Thatcherfest, the one thing that made me laugh was the story of the confusing hashtag. What happened is that a curious website called “Is Thatcher Dead Yet?” launched a new hashtag — #nowthatchersdead — which apparently caused consternation among devotees of the singer Cher, who read it as news that their idol had passed away.

I only saw Margaret Thatcher in the flesh once, but the occasion left an indelible impression. It was in the Autumn of 1986 at the Tory party conference in Bournemouth, which I was covering for the Listener, a BBC magazine that is now, sadly, extinct. The Highcliffe Hotel, where all the party grandees were staying, is about a hundred yards up a clifftop path from the Conference Centre where these kinds of proceedings take place. I was standing on the path at lunchtime, surveying the extraordinary security arrangements for the event (which included a Royal Navy destroyer patrolling offshore, and snipers on the rooftops all around), when suddenly Thatcher emerged from the Conference Hall heading for the hotel. And then I saw an extraordinary sight: a middle-aged woman in high heels, carrying a handbag and surrounded by a ring of armed, supremely-fit bodyguards. She was walking so briskly uphill that some of the goons had to break into a trot to keep up with her.

She was such a divisive figure during her political lifetime: remember all that stuff about her being a “milk-snatcher” when, during her time as Education Secretary, she stopped free milk for primary schoolchildren? What’s extraordinary about the reaction to her death is the extent to which she retains her capacity to polarise opinion. Hence the impromptu parties that reportedly greeted news of her demise (though one is always suspicious of such convenient spectacles — convenient, that is, for the Tory tabloids; their reports remind me of the fake news footage purporting to show Pakistanis dancing in the streets after learning of the 9/11 attacks in 2001). And the lock-down security arrangements for her funeral in London next Wednesday, when critics plan to hold their own celebrations of her passing.

In the midst of all this yah-boohery, it’s hard to find cool appraisers. My hero, in this regard, is the late Hugo Young, who wrote not only a fine biography of Thatcher, but also a great appraisal, which the Guardian reprinted in full yesterday. At one point, Young observes:

I think by far her greatest virtue, in retrospect, is how little she cared if people liked her. She wanted to win, but did not put much faith in the quick smile. She needed followers, as long as they went in her frequently unpopular directions. This is a political style, an aesthetic even, that has disappeared from view. The machinery of modern political management – polls, consulting, focus groups – is deployed mainly to discover what will make a party and politician better liked, or worse, disliked. Though the Thatcher years could also be called the Saatchi years, reaching a new level of presentational sophistication in the annals of British politics, they weren’t about getting the leader liked. Respected, viewed with awe, a conviction politician, but if liking came into it, that was an accident.

This is a style whose absence is much missed. It accounted for a large part of the mark Thatcher left on Britain. Her unforgettable presence, but also her policy achievements. Mobilising society, by rule of law, against the trade union bosses was undoubtedly an achievement. For the most part, it has not been undone. Selling public housing to the tenants who occupied it was another, on top of the denationalisation of industries and utilities once thought to be ineluctably and for ever in the hands of the state. Neither shift of ownership and power would have happened without a leader prepared to take risks with her life. Each now seems banal. In the prime Thatcher years they required a severity of will to carry through that would now, if called on, be wrapped in so many cycles of deluding spin as to persuade us it hadn’t really happened.

These developments set a benchmark. They married the personality and belief to action. Britain was battered out of the somnolent conservatism, across a wide front of economic policies and priorities, that had held back progress and, arguably, prosperity. This is what we mean by the Thatcher revolution, imposing on Britain, for better or for worse, some of the liberalisation that the major continental economies know, 20 years later, they still need. I think on balance, it was for the better, and so, plainly did Thatcher’s chief successor, Tony Blair. If a leader’s record is to be measured by the willingness of the other side to decide it cannot turn back the clock, then Thatcher bulks big in history.

I think that’s right. What people on the left sometimes overlook is that Britain in the late 1970s really was a busted flush. It was industrially moribund, locked into 19th century industries and mindsets that were bound to be supplanted by Far Eastern competition, and with state ownership of monopolies in areas like telecommunications. Left to its own devices, the UK would have become as dirty and uninspiring as one of the Soviet empire’s European satraps. Much of the traumatic change that happened on Thatcher’s watch would have happened anyway, because the economic forces that drove that kind of de-industrialisation were unstoppable. And what happened would have happened no matter who was in power. The problem with Thatcher is that she applauded what was happening, and seemed relatively unperturbed about the pain that it caused for ‘ordinary’ people.

In that sense, she was a cheerleader for the Schumpeterian wave of creative destruction that surged over British industry. As Young puts it, she changed

the temper of Britain and the British. What happened at the hands of this woman’s indifference to sentiment and good sense in the early 1980s brought unnecessary calamity to the lives of several million people who lost their jobs. It led to riots that nobody needed. More insidiously, it fathered a mood of tolerated harshness. Materialistic individualism was blessed as a virtue, the driver of national success. Everything was justified as long as it made money – and this, too, is still with us.

Thatcherism failed to destroy the welfare state. The lady was too shrewd to try that, and barely succeeded in reducing the share of the national income taken by the public sector. But the sense of community evaporated. There turned out to be no such thing as society, at least in the sense we used to understand it. Whether pushing each other off the road, barging past social rivals, beating up rival soccer fans, or idolising wealth as the only measure of virtue, Brits became more unpleasant to be with. This regrettable transformation was blessed by a leader who probably did not know it was happening because she didn’t care if it happened or not. But it did, and the consequences seem impossible to reverse.

The other cool appraisal I admired came from Ross McKibbin, in an LRB piece published many years ago. At one point, he asks why — given that for the majority of the population there was, for whatever reason, a significant rise in real living standards during her premiership — was the whole thing in the end such an electoral disaster for the Conservative Party? “The fact is”, he writes

that the disaster owed much to Thatcher’s own behaviour and aspirations. Her fundamental aim was to destroy the Labour Party and ‘socialism’, not to transform the British economy. If the destruction of socialism also transformed the economy, well and good, but that was for her a second-order achievement. Socialism was to be destroyed by a major restructuring of the electorate: in effect, the destruction of the old industrial working class. Its destruction was not at first consciously willed. The disappearance of much of British industry in the early 1980s was not intended, but it was an acceptable result of the policies of deflation and deregulation; and was then turned to advantage. The ideological attack on the working class was, I think, willed. It involved an attack on the idea of the working class – indeed, on class as a concept. People were, via home ownership or popular capitalism, encouraged to think of themselves as not working class, whatever they actually were. The market thus disciplined some, and provided a bonanza for others. The economy was treated not as a productive mechanism but as a lottery, with many winners. The problem with such a policy was that it created a wildly unstable economy which Thatcher’s chancellors found increasingly difficult to control, and in which many of the apparent winners later became aggrieved losers.

The attempt to destroy the Labour Party also involved many risky political strategies. For the Conservatives to take up populism, to declare themselves in favour of a classless society and against Old Etonians, is to play with fire. There is no certainty that the outcome will be the one that is wanted. Although, as Campbell demonstrates, Thatcher spent much time cosseting tabloid editors and grovelling to their employers, it is arguable that in the long term the journalistic techniques of a commercially driven tabloid press did as much damage to the Conservatives as to Labour. The Sun is an unreliable ally, and those elites Thatcherism was designed to prop up emerged no less damaged by it than trade-union leaders. At any event, one consequence of these ‘democratic’ attempts to refashion the British class system for an essentially reactionary purpose was to create a middle class only loosely tied (or tied not at all) to the Conservative Party and almost to destroy the old Conservative working class, an indispensable element of its traditional electorate. And Lady Thatcher bears much of the responsibility for this.

And the ultimate, irony, of course, is that we have now returned to being ruled by Old Etonians.

Facebook’s land grab

As usual, Walt Mossberg gets to the heart of the matter. Here he is on the significance of the “Facebook phone”:

In effect, Facebook has created its own phone without having to build or sell hardware. The HTC First, so far the sole phone on which it’s preloaded, even boots up with the Facebook logo.

I found Facebook Home to be easy to use, elegantly designed and addictive. Although I’m a regular Facebook user, I found that, with Home, I paid more attention than ever to my news feed, Liked items more often and used Facebook’s Messenger service more often. So, if you are a big Facebook fan, Facebook Home can be a big win.

But I found some downsides. Facebook Home blocks the one-step camera icon some Android phone makers place on their lock screen to allow you to take pictures without first unlocking the phone. It also overlays other lock-screen features some Android phone makers include, such as weather information or favorite app icons. And if you do go to the icon-filled home screen, you’ll find that Facebook Home has taken that over as well, topping the screen with a bar that makes posting to Facebook easier and eliminating the bottom bar of heavily used apps.

By default, the first of these Facebook Home app screens contains Facebook’s apps, including the popular Facebook-owned service, Instagram, plus apps from other companies, like Google GOOG +0.36% Maps and Google Search, and the camera app. You can remove these and add others.

With Home, Facebook is essentially staging a land grab of Android, the hugely successful mobile operating system made by one of its key rivals, Google. Facebook Home leaves all the standard Google apps in place and doesn’t alter the underlying Android operating system. But because it’s so dominant, it makes it less likely that a user with limited time will launch Google products that compete with Facebook, such as Google’s own social network, Google+, or rival services from other companies, such as Twitter.