Sunday, September 27, 2009

MYTHS OF THE FREE MARKET

By : Kenneth S. Friedman


BLIND FAITH
The gap between rich and poor is now the widest in US history. This is disturbing, for if history is any guide we have unwittingly placed ourselves in grave danger.

Over the last millennium Europe has witnessed long cycles of widening and narrowing economic disparity. In each cycle, once the gap between the rich and the rest widened beyond a certain point, it presaged decline and disaster for all of society, the rich as well as the poor. Could we be seeing the first tremors of a new cycle, the outliers of the next menacing storm? In recent decades, many US citizens have come under increasing financial pressure. Since the 1970s, our number of working poor has increased sharply. Nearly all of our much-vaunted newly-created wealth has gone to the richest.

Law enforcement has been unable to cope with burgeoning drug use at all levels of society. Television and radio casually air sexually explicit programs that would have been rejected in disgust by previous generations. Sexually transmitted diseases have become pandemic. (The number of people in the U.S. infected with genital herpes now stands at 45 million and is increasing at the rate of 1 million per year.) These developments have fed a widespread perception of irresponsibility and increasing licentiousness.

Children today spend more time than ever in front of television sets or video games. They spend less with books, peers or parents. Where are they learning their values? What are the values they are learning?

The alienation of large groups of people has led to private militias and to an increase in violence that has become pervasive. With 60,000 incidents of workplace violence per year, “going postal” is part of our vocabulary. “Road rage” is another new expression and a measure of increasing violence by “normal” people. Since 1980 our prison population has increased five-fold.

These developments have exacerbated a polarization between a new evangelical Christian revival and those who are distrustful of religious dogmatism but have no solutions to the very real problems the evangelicals are addressing. Could these trends be harbingers of something more ominous, a more violent fracturing of society?

For a country that has prided itself on its resourcefulness, the inability to address such problems suggests something deeper at work. There is something, powerful but insidious, that blinds us to the causes of these problems and undermines our ability to respond. That something is a set of beliefs, comparable
to religious beliefs in earlier ages, about the nature of economies and societies.
These beliefs imply the impropriety of government intervention either in social
contexts (libertarianism) or in economic affairs (laissez faire).

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Advanced International Trade: Theory and Evidence

By : Robert C. Feenstra


This book is intended for a graduate course in international trade. I assume that all readers have completed graduate courses in microeconomics and econometrics. My goal is to bring the reader from that common point up to the most recent research in international trade: in both theory and empirical work. This is not intended to be a difficult book, and the mathematics used should be accessible to any graduate student.
The material covered will give the reader the skills needed to understand the latest articles and working papers in the field.

At the same time, I am aware that many readers will become teachers in the field, especially at the undergraduate level. I feel that it is suitable, then, to start each chapter by introducing simple graphical techniques that can be used in teaching. Following this, I move towards the equations for each model. A set of problems at the end of each chapter give the reader some experience in manipulating these equations. An instructors manual that accompanies this book provides solutions to the problems.1 In addition, I have included empirical exercises that replicate the results in some chapters. Completing all of these could be the topic for a second course, but even in a first course there will be a payoff to trying some exercises. The data and programs for these can be found on my home page and also at the website.

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A Political and Social History of Modern Europe

By : Carlton J. H. Hayes


The book is a long one, and purposely so. Not only does it undertake to deal with a period at once the most complicated and the most inherently interesting of any in the whole recorded history of mankind, but it aims to impart sufficiently detailed information about the various topics discussed to make the college student feel that he is advanced a grade beyond the student in secondary school. There is too often a tendency to underestimate the intellectual capabilities of the collegian and to feed him so simple and scanty a mental pabulum that he becomes as a child and thinks as a child. Of course the author appreciates the fact that most college instructors of history piece out the elementary textbooks by means of assignments of collateral reading in large standard treatises. All too frequently, however, such assignments, excellent in themselves, leave woeful gaps which a slender elementary manual is inadequate to fill. And the student becomes too painfully aware, for his own educational good, of a chasmal separation between his textbook and his collateral reading. The present manual is designed to supply a narrative of such proportions that the need of additional reading will be somewhat lessened, and at the same time it is provided with critical bibliographies and so arranged as to enable the judicious instructor more easily to make substitutions here and there from other works or to pass over this or that section entirely. Perhaps these considerations will commend to others the judgment of the author in writing a long book.

Nowadays prefaces to textbooks of modern history almost invariably proclaim their writers' intention to stress recent happenings or at least those events of the past which have had a direct bearing upon the present. An examination of the following pages will show that in the case of this book there is no discrepancy between such an intention on the part of the present writer and its achievement. Beginning with the sixteenth century, the story of the civilization of modern Europe is carried down the seventeenth, eighteenth, and nineteenth centuries with constant crescendo. Of the total space devoted to the four hundred years under review, the last century fills half. And the greatest care has been taken to bring the story down to date and to indicate as clearly and calmly as possible the underlying causes of the vast contemporaneous European war, which has already put a new complexion on our old historical knowledge and made everything that went before seem part and parcel of an old regime.

As to why the author has preferred to begin the story of modern Europe with the sixteenth century, rather than with the thirteenth or with the French Revolution, the reader is specially referred to the Introduction. It has seemed to the author that particularly from the Commercial Revolution of the sixteenth century dates the
remarkable and steady evolution of that powerful middle class−−the bourgeoisie−− which has done more than all other classes put together to condition the progress of the several countries of modern Europe and to create the life and thought of the present generation throughout the world. The rise of the bourgeoisie is the great central theme of modern history; it is the great central theme of this book.

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TWENTIETH-CENTURY GERMAN POLITICAL THOUGHT

By : Peter M. R. Stirk


Any attempt to survey German political thought in the twentieth century is bound to be influenced by awareness of the turbulence of German political history and especially by the shadow of the Third Reich, the crisis and collapse of the Weimar Republic that preceded it and the division of Germany that followed it for almost half a century. If one considers the historical context of German political thought a
little more widely, that impression of turbulence is enhanced, at least for the first half of the century. At the beginning of the twentieth century, German political theorists inhabited not only the recently formed German Reich to the north but also the multi-national Habsburg Empire to the south. Many of the theorists prominent in the early chapters of this account were born in or influenced by
the peculiar nature of that empire. Its collapse at the end of the First World War left behind a largely homogeneous German Austria that was subsequently incorporated into the Third Reich and then reestablished as an independent state at the end of the Second World War. Not surprisingly, this political discontinuity is reflected in many accounts of the development of German political thought.

According to Wilhelm Hennis, despite what he described as the ‘German misery’ of the preceding centuries, the German lands had not seen anything comparable to the crisis of legitimacy experienced in France and England in the religious wars of the sixteenth and seventeenth centuries until 1933. Only in the twentieth century did
Germany, the ‘belated nation’, experience an analogous crisis ‘with all that goes with it: exile on a massive scale, ‘‘internal emigration’’, fanaticism, collapse of civil order, finally ethically motivated resistance’. The sense of rupture has been expressed even more starkly by Ju¨ rgen Habermas, who was influenced by the Frankfurt School theorists who formed part of that massive exile. According to
Habermas:

Unfortunately, in the cultural nation of the Germans, a connection to universalist constitutional principles that was anchored in convictions could be formed only after – and through – Auschwitz. Anyone who wants to dispel our shame about this fact with an empty phrase like ‘obsession with guilt’ . . . anyone who wants to recall the Germans to a conventional form of their national identity, is destroying the only reliable basis for our tie to the West.2

Many people do not agree with Habermas’s concern that there could be a plausible threat to Germany’s tie to the west, but there is general agreement that German political thought was distinctive, that there was a specifically German tradition of political thought and that this distinctiveness has either evaporated as part of a wider process of westernisation or has at least diminished. Exactly when and how this
process took place, and exactly how complete it is, is highly disputed. It is notable that those suspected of clinging to elements of the old tradition are often criticised by invoking their supposed proximity to discredited theorists of the past. A prime example of this is the use of Carl Schmitt, a political theorist who was highly critical of the democratic system of the Weimar Republic and was tainted by his association with the Third Reich. To identify someone’s ideas with those of Schmitt is often to imply, and sometimes to explicitly assert, that those ideas are not only misguided but also politically dangerous. Even those who take a more favourable view of Schmitt often take care to mark out their distance from him in key respects. To that extent, the shadow of the failure of Weimar and the Third Reich
extends to contemporary German political thought. Similarly, consideration of the German tradition of political thought prior to the Third Reich, and even prior to the Weimar Republic, is inevitably accompanied by knowledge of what was to follow. Sometimes the same critical strategy is deployed. The description of Carl Schmitt as
the legitimate heir of Max Weber by Habermas was rightly perceived as a damning indictment of Weber. More typically, theorists are accused of an inability to comprehend the true nature of modern parliamentary democracy precisely because of their entrapment within a tradition of political thought hostile to it. The picture is not a wholly monochrome one, though usually those exempt from the general judgement are presented as isolated figures whose exceptional status proves the general rule. One example of this is the interest in Hugo Preuss, who drafted the Weimar constitution but who was relatively neglected until recently.

The prism of Weimar’s failure and the Third Reich is difficult to avoid, not least because of the persistent reference to those traumas by later political theorists. Yet it is also distorting. It is so, in the first place, because theorists at the beginning of the century, and many on the eve of the advent of Third Reich, had no conception of a political system like the Third Reich. This statement is more than a trivial and obvious observation about our inability to predict the future. One of
the difficulties that political theorists had, and still have, in dealing with the Third Reich is its novelty and inconsistency. The difficulty posed by the nature of the regime has been well put by a recent commentator: ‘The quest for a system seems to me a wrong approach to begin with, since no system existed and none was supposed to’. Of course, many did seek to define a system, including those who remained within Germany and more or less enthusiastically supported the regime. As will be shown in Chapter 3, however, their efforts were frustrated and they were far from agreed on what the nature of the regime was. The exiles were also confronted with the elusive quality of the regime. The sheer novelty of the Third Reich and its possible resemblance to Stalinist Russia induced a search for the roots of this
strange phenomenon which some, like Helmuth Plessner, found in the ‘belated nation’ of the Germans while others, like the Frankfurt School members Theodor Adorno and Max Horkheimer, went back to the beginnings of western civilisation in an attempt to explain how something like this regime was possible at all.

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THE GLOBAL MARKET FOR ASSAULT RIFLES

By : Phillip Killicoat



INTRODUCTION
Small arms are estimated to be responsible for between 200,000 - 400,000 deaths around the world each year. Approximately 20,000 – 100,000 of these firearm deaths occur in conflict settings (Small Arms Survey 2005, Kopel, Gallant and Eisen 2004, and Lacina and Gleditsch 2005). As economic commodities, firearms are subject to the forces of demand and supply and are actively traded on legal and illicit markets. The small arms market may be viewed as a function of the incentives and constraints faced by buyers, suppliers and regulators. This paper introduces cross-country, time-series data on assault rifle prices thus making it possible to quantitatively examine the nature of the small arms market.


"Small arms are attractive tools of violence for several reasons. They are widely available, low in cost, extremely lethal, simple to use, durable, highly portable, easily concealed, and possess legitimate military, police, and civilian uses. As a result they are present in virtually every society. (Boutwell and Klare 1999)"

Despite being a key component in conflict, small arms have only recently begun to receive academic attention. So far research has been almost exclusively case-study driven making it difficult to draw general empirical lessons. Book length treatments of small arms which follow this trend include Boutwell and Klare (1999) and Lumpe (2002). Brauer (2007) surveys the small arms literature in the forthcoming Handbook of Defense Economics and concludes that the small arms market has not been well examined theoretically, or empirically. The first tentative steps towards generalizable models of the small arms market are currently underway. Brauer and
Muggah (2006) develop a conceptual theory of small arms demand as a function of means and motivation, an adaptation of the standard determinants (income, prices and preferences) of neoclassical consumer demand theory (Varian 1992).

On the supply side, Marsh (2007) develops a conceptual model for the illicit acquisition of small arms by rebel groups. Among other hypotheses, Marsh’s model predicts that the more liquid is the arms supply in a particular country, i.e. the more easily individual combatants can obtain weapons through independent suppliers, the more difficult it will be to mount and maintain a united and coordinated insurgency.

There are a number of reasons why small arms have been all but ignored in the quantitative analysis of conflict. The historic state-centric bias of defense economics led to an almost exclusive focus on inter-state military strategy. In relation to military weapons, research has principally been concerned with the development and acquisition of large-scale military technology, such as nuclear weapons. Perhaps the most important reason for the dearth of attention given to the role of weapons in civil war is that usable data have been unavailable. The policy research community, led by the Small Arms Survey (SAS), the UN’s Small Arms and
Demobilisation Unit, the Bonn International Center for Conversion, and the Norwegian Initiative on Small Arms Transfers (NISAT), has produced a great deal of survey and case-study work. However, no statistical analysis of the growing volume of survey information has yet taken place.

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