Economics and similar, for the sleep-deprived

A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?

Update: seemingly not

Update: Oh yeah!

Friday, August 19, 2005


Well, if Mohammed won't go to the mountain, the mountain sometimes has to come to Mohammed. Now that I'm unable to go over and pick fights with Harry's Place, they're being very accomodating in coming over here to pick fights with me. Marcus has decided to open up a third phase of the International Law Wars in the comments on my George Galloway thread below. I think he comes out of it very badly really but maybe you lot will be able to explain to me why I'm wrong. It all gets quite bad-tempered so it's pretty entertaining.
1 comments this item posted by the management 8/19/2005 06:24:00 AM

Thursday, August 18, 2005

Fuck off, the lot of ye

Following John B's example I have decided to alienate and annoy my entire readership by sticking up for a bunch of people who are about as unpopular as it is possible to be; the Jewish settlers in the Gaza Strip.

Why do they need to be evicted from their houses? Presumably they have been told that the Palestinians are in charge now and have decided to take their chances. If they are being chucked out because the Palestinians' first act as masters of their own destiny is to want them chucked out, then do the Palestinians really have the right to ethnically cleanse their territory in this way? If they are being chucked out because the State of Israel doesn't want the long-tailed liability of having to defend them at some future date, then is this really any way to run a railroad? Surely a more sensible way of going about the problem would be to tell them that the IDF was no longer at the other end of the phone, that they would have to comply with local laws, that local courts in future would probably take a more draconian line on the practice of shooting random Arab youths who happened to wander past their compounds and that there was a reasonable social welfare system for them back in Israel if in light of the above they decided to chuck in their cards. Perhaps I am a hopeless optimist about the feasibility of a multiethnic state in the Middle East but it does seem a bit much to legislate against even trying one. What am I missing here? Update: quite a lot, apparently, see comments.
0 comments this item posted by the management 8/18/2005 11:25:00 PM

Wednesday, August 17, 2005

Banned again

Gosh how disappointing, after having been specifically promised that this wouldn't happen because they found me "entertaining" (although also "boring" so I suppose I should have realised that the entertaining thing would only ever be a passing fad). I think it's because of this bit where I mildly remonstrate with an attempt to smear Haifa Zargana[1] as a collaborator with Saddam. Oh well I dare say I shall recover.

I have been doing a few more constructive things around the blogs though, of which perhaps more anon.

[1]Who appears to me to have a number of quite bizarre political views but who does not seem to be guilty of the specific charge she is accused of here.

Update: I have just been told that I am not banned, although I get exactly the "You are not allowed to post comments" message that I got on each of my four previous bans. This might possibly be some sort of technical snafu but at present I am not inclined to expend much effort in finding out.

Update Update: Of course I'm bloody banned, I can't believe I fell for that. Apparently though, it's only a game and I shouldn't take it too seriously when people call me a twat behind my back and don't let me respond.
0 comments this item posted by the management 8/17/2005 08:43:00 AM

Friday, August 05, 2005

Aroond the bloags

Recently I ve been ... arguing Millian liberalism over at the Sharpener (btw, sorry lads for turning your comments section into a secondary theatre of Harry�s Place), sticking up for Eurocrats chez Abiola and talking various bollocks at John�s site. Although rather frighteningly, probably not lowering the average quality there as SBBS has a bit of a loon infestation at present.
1 comments this item posted by the management 8/05/2005 06:31:00 AM

Wednesday, August 03, 2005

Two falls, two submissions and a knockout

(posted here because I'm having temporary techie problems with CT)

With the inevitable Barthesian logic of a good wrestling show, Gorgeous George Galloway has made suckers of us all. After bringing a smile to the stoniest of faces when he took apart Norm Coleman and gang, he's gone on a tour of Al-Jazeera territory, with some frankly unforgivable rhetoric (I've watched the footage and can confirm that in this specific instance, the translation is accurate). I have always known that Georgeous Gorge was going to end up being an embarrassment to the antiwar movement and here you go.

To be honest, listening to these orations, my reaction was that this is on the absolute cusp of being the sort of thing that a decent, liberal society ought to be chucking people in jail for. The issue is the language; a charitable interpretation might be that GG has allowed his own gift for turning a fiery phrase to combine with the hyperbole beloved of Arab literature ("a thousand curses, etc, etc) to quite dangerous effect. A less charitable interpretation would be that, like Enoch Powell with his River Tiber, he knows exactly what he's fucking doing and doesn't care. It is entirely possible to express the opinion that the current status of Jerusalem and Baghdad is problematic without saying a) "your beautiful women are being raped by the foreigner" or b) "your rulers are doing nothing to protect your beautiful women". If this was said in the UK, I would guess it would be exactly the sort of thing that would be captured by the incitement to hatred laws (either racial or religious depending on whether he's going on about Islam or specifically Arabs). I'm not a great fan of those laws, so I wouldn't necessarily support such a prosecution, but I would certainly regard it as a misfortune he'd brought on himself.

This is entirely compatible with Millian liberalism, by the way. If someone wants to express the vilest of views, they ought to be entitled to do so in the same public fora as the rest of us. But always with the caveat that you're not allowed to directly incite violent or socially destructive behaviour. You can preach from the pulpit or publish in your newspaper that group X are the spawn of Satan and that God abominates their presence. But when you start wheeling out the metaphors and stirring up the crowd, then you've crossed a line my friend; the line between trying to convince people by argument and trying to force them into your view of the world by things that are not arguments. Galloway isn't speaking truth to power on Al-Jazeera like he was in the House of Representatives; he's speaking untruths to the powerless. And if you're doing that, you mind your language or you start undercutting the basis of your right to free speech. This is hardly a first offence too, but it's the most egregious one I've seen (the "wolves" comment that got him chucked out the Labour Party was of a piece, but less obviously likely to stir up terrorist violence). This bugger ought to have been kept at arms' length from the get-go and now that he's won his seat and made the anti-war points, I would suggest that the rest of the RESPECT (George Galloway) coalition might want to consider whether the parenthetical part of their party's name is on balance worth the trouble he causes.

Sigh. I don't really blame GG for this; it would be pointless to do so, like getting angry with Ravishing Rick Rude for pulling out a pair of brass knuckles while Hulk Hogan's arguing with the referee. The pantomime has to play itself out and that's and end to it.
0 comments this item posted by the management 8/03/2005 11:27:00 AM

Tuesday, July 26, 2005

The D-Squared Digest One Minute MBA Part 2: Managing the Risk of Getting Killed

Latest in an occasional series, applying the knowledge I gleaned from my business school education to various important problems of the day. I realise that these MBA posts wind some people up, but like most of the best stuff they teach you at business school, it�s four parts applied economics to three parts common sense. Special note for people who �hate MBAs� � I don�t actually have an MBA as my actual business school qualification was the London Business School�s Masters in Finance program � quite like an MBA but with more of a focus on financial markets and substantially cheaper. Anyway, onward with the basic MBA principles. This time round, I�m producing some general principles for dealing with a terrorist threat. In particular, the question of shooting people on the streets of London.

The optimal frequency of disasters is not zero. This graceful formulation is due to Prof. Richard Portes, who used to say it about emerging market financial crises. However, it�s a fundamental principle of risk management and one of entirely general application. Most dangers can be absolutely eliminated for all practical purposes, but only at unacceptable cost. This is true whether you�re thinking about �inconveniencing� people in the name of security (note here that the word �inconveniencing� is being used in the current newspaper sense as a portmanteau term for having to put up with having your rucksack searched, and allowing the police to detain you without charge for up to three months) or trying to design a rule of engagement for armed police which will avoid their shooting innocent people. If you�re trying to bring the risk down to zero, then you have almost certainly over-engineered. So you should design the system to leave some positive risk. Risk, by the way, is the risk that something very bad will happen; the fact that ex post something very bad did happen is not good evidence that ex ante the risk tradeoff made was the wrong one, nor is it evidence that the tradeoff needs to be changed going forward. Having said that, acceptance of the statistical inevitability of bad events needs to be tempered with another important principle:

By and large, you get the error rate that you are prepared to tolerate. The most usual case where you get taught this one is in photo developing shops, where the rate of defective prints can differ wildly between superficially identical units. The lesson learned was that, although mistakes are inevitable in any process involving people, the way that you deal with mistakes makes a big difference. If you wave it off as �no biggie�, then you will get more and more mistakes, and when it comes time to do something about it, it will be much harder because your employees have become conditioned to having their error rates accepted. On the other hand, if you make a big fuss about every single mistake and constantly work to understand how it was caused, then firstly, your processes will improve over time, and secondly the simple fact of having to file the report will encourage people to concentrate and make fewer mistakes. This is the basis of six-sigma reliability programs.

Application. It is an entirely salutary thing that the British police force has, as a general principle, an inquiry by an outside Force into every single case of death caused by police officers. On the other hand, it is entirely the opposite of salutary for the Commissioner of the Metropolitan Police to stand up at a press conference when his force have killed an innocent man and say �this sort of thing is bound to happen again and again�. While this may be true, factually, it is entirely wrong for the man whose job it is to make sure it doesn�t happen again to say so. When a surgeon chops the wrong leg off, you do not expect the hospital to say �well this is bound to happen and there�s nothing anyone can do about it� and the police should not hold themselves to a lower standard.

It is usually incorrect to believe that you are on the efficient frontier. This is a specifically business-school piece of wisdom, and one of the big points of departure between business school types and economists. Economists almost always think about things in terms of tradeoffs; more X means less Y. This is because economists think of things in terms of abstract idealised production functions with substitutable inputs and outputs. If you�re actually teaching people to manage factories, however, then you are thinking about concrete processes (particularly if it is a concrete factory) which are usually about as far from idealised as you can get. Unless your process is at the absolute bleeding edge of what is possible, tradeoffs are not necessarily the correct way to think about making improvements to it. Furthermore, if you have a complicated and non-optimised production process, it is not at all guaranteed that the tradeoff which the frontier implies is there at all; think about someone trying to get a complicated piece of software written who decides to trade off time against cost by adding more programmers to an already late project.

Application. Talking about the �tradeoff� between the number of innocent people we kill versus the number of lives we save by killing guilty people, is probably misplaced. Most of what we want to do at present to save innocent people involves gathering better intelligence. And this would make us less likely, not more, to kill innocent people. Conversely, it is not at all obvious, given our current state of information, that encouraging Met officers to be even quicker on the trigger than they already are, would make us any safer at all. Since we are looking for less than a dozen people in a city of seven million, a simple Bayesian calculation suggests that until the state of intelligence reaches some threshold level, a random selection from the pool of suspicious people is more likely to be innocent than guilty (and even if guilty, is more likely than not to not actually have a bomb on him at the time, reducing the potential benefit even more.

Ambiguous instructions infallibly generate errors. This is a lot of the reason why so much �management-speak� is so pedantic and goes so humourously out of its way to state the obvious. (Scott Adams has made a career out of this). When you�re describing a process, you state the obvious so that everyone knows the same obvious (this principle was copied from the military, who are also keen on stating the obvious), and in order to minimise the number of �exceptions� � cases which do not fit into any of the categories covered by rules. When faced with exceptions, particularly under stress conditions, people often either freeze (failing to put the case into any category, leading to inaction when action is needed) or panic (place the case into an inappropriate category, usually leading to excessive action).

Application. The inquiry will make this clear, but it certainly looks as if the Menezes shooting was an �exception� in this sense for both the police officers and Mr de Menezes. A police officer who is unclear about the rules of engagement could quite understandably decide to err on the side of preventing a suicide bomb. A Brazilian electrician living in a quite dangerous part of London could quite understandably decide that running away from armed men was a good idea if he didn�t know that we had a shoot-to-kill policy. And it is very worrying indeed to me that nobody, including anybody briefing the media at the Met, seems to know when it was that this policy was introduced.

Depending on who you listen to, the new-style �shoot to hope to kill to protect� policy was brought in as part of a top-secret operation in early 2002 as part of �Operation Kratos� by Lord Stevens. Or possibly introduced in 2003. Or possibly in ACPO guidance following the second Stanley inquest. There are also suggestions (can�t find on internet but clearly remember from broadcast news) that the armed officers deployed on regular patrol duty after 7/7 were given a whole new set of instructions. It appears that the UK has had at least three shoot-to-kill policies, above and beyond the standard understanding that guns are for shooting and shooting carries a danger of death. In fact we've had so many shoot-to-kill policies that it's rather surprising the news didn't leak out to Joe Public. I think any inquiry should very certainly be looking closely at whether, somewhere between Lord Stevens� standing orders, the 2003 terrorism changes and the 2004 ACPO note, there is a single coherent and current set of rules of engagement and whether these rules were communicated effectively to the officers on the ground. If they weren�t, then someone at a desk somewhere is guilty of something that looks to me to be not entirely unlike negligent homicide.

In any case, when one is told at a press conference that �we have had a shoot-to-kill on suspicion policy for the last few years�, the correct response is not �oh really? thanks for keeping us in the loop�. The kind of policy that did for Mr de Menezes is not a small change to the general arrangement of things in the UK. It is the sort of thing that ought to happen in the House of Commons; not necessarily through primary legislation, but at the very least the Home Secretary should have made the announcement and allowed for debate. It is just not good enough to have something like this done through secret administrative order; I would say the same about changes to the planning guidelines for supermarkets and this is more important.

Anticipated events do not change the information set. This is one of the cornerstones of efficient markets theory but again, is of much more general application. If you expect something to happen then the fact that it has, in fact, happened, is not new news to you. Since we had all expected that London was going to be bombed, sooner or later, it is clearly wrong to say that �everything has changed� as a result of the bombing. If it is a good idea now to pass laws against �glorifying terrorism� and to allow the police to hold terrorist subjects for three months without charge (it isn�t) then it was a good idea three weeks ago (it wasn�t). This makes it slightly more heartening that we introduced our shoot-to-kill policy a long time ago, on the basis of proper planning, although I suppose that at least if we�d introduced it in a panic this week we would have known that we were doing it.

And that�s about it. That will be $18,000 please.
0 comments this item posted by the management 7/26/2005 07:14:00 AM

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