EU plans for VAT taxation are doomed to fail. Again.

Taxation is the potential downfall of the EU as an institution. The reason is that within the EU, several member states are making money from the tax evasion in other member states, a situation akin to having a wife slowly murdering her husband with poison. Unless this stops, a divorce becomes inevitable.

Luxemburg, the Netherlands, Ireland, Lichtenstein, Austria, London, and several others are at it: they help large corporations avoid their taxation responsibilities. They either make deals that allow companies to hide their tax obligation, have idiosyncratic definitions under which there are less tax obligations, provide re-labelling services such that head-offices can be a mere post-box, etc.

These tax-avoidance enablers have also systematically frustrated all attempts over the last 30 years to harmonise taxation and reverse the damage they have done to the integrity of the other nation states in the EU. Whenever the issue of tax evasion was in the public eye, for instance during the GFC, they stalled by insisting tax evasion should be solved internationally and should include all other tax havens. Predictably, these were impossible demands. They have also made life difficult inside committees and government forums.

The EU bureaucracy has just put out a new set of proposals regarding VAT on large international corporations (like Google and Amazon), impact evaluated and all. I have read them and predict they will not be implemented, nor would they work anyway.

For one, the EU commission has no power to enforce new tax rules, and these proposals are in a long line of ignored prior proposals. To become law they would need the unanimous backing of all EU members. They hence need the cooperation of about 5 countries that would lose billions if they complied. Fat chance, even with Brexit reducing the political clout of London.

Secondly, the proposals repeat the main mistake of the past: they advocate a rules-based administrative system of taxation which is cumbersome, highly-complex, and easy to game. I explain how over the fold. Continue reading “EU plans for VAT taxation are doomed to fail. Again.”

Adverse Action Lawyer wanted in Frijters versus UQ case

I am seeking a lawyer to run an Adverse Action case connected to the recent Fair Work Commission verdict that found systematic breaches of procedures and procedural fairness in the University of Queensland’s actions against me following my research on racial attitudes in Brisbane. I first raised these breaches late 2013, but they were never addressed, with lots of new ones added to them as the case dragged on. The VC of the university was also personally informed of these breaches in April 2014, publicly denying there was anything wrong about UQ’s action in February 2015. He was again informed in March 2015, consistently failing to rectify breaches of procedure brought to his attention. I wish to bring an Adverse Action case to claim back my considerable costs.

feb2015cover3264x1078

I expect the case to be worth at least a few hundred thousand dollars in terms of damages (legal cost, value of my time, etc.), and for it to be potentially one of many others because the FW case uncovered widespread breaches of procedures in UQ’s handling of misconduct cases. So there might well be many others who are now looking to bring Adverse Action cases against UQ.

I offer a pay-for-success contract wherein the first part of any awarded damages would go to the lawyer, but after a threshold payment I want 50% to go to the successful lawyer and 50% towards Vanavil, which is a school for orphaned victims of the 2004 Tsunami flood in India. I feel that helping the poorest Indians will go some way to nullify the damage that the managers of UQ did when they suppressed evidence of adverse treatments of Indians (and Indigenous peoples) in Brisbane and made it harder to research these things in general. And I want to feel that I haven’t wasted my time these last three years on fighting mindless bureaucracies, but that my efforts ended up helping people in need.

Negotiations on the offered contract are possible. Please contact me on email if you are interested or have a good suggestion for a good adverse action lawyer ( p dot frijters AT uq dot edu dot au).

[Ps. The VC of UQ was still making inappropriate claims last week on the UQ media about his lack of involvement and has refused to retract his claims this last week when I pointed his errors out to him.]

Best practice governance of top academic departments

Over the last 15-20 years academic school meetings have gone from rambling and unstructured brawls to dull “executive infomercials”. The former led to marathon meetings. The current model has led to a middle-management culture that often does not take advantage of the very valuable specialists skills of talented, highly trained (and experienced) scholars in the department. Nor does it allow for reasonable checks and balances on the powers of the executive–something that is vital for the management of any group of academics.

Our school at the ANU has adopted a system informed  both by ANU’s academic board and how the world’s top economics departments operate. The following is the template that we have adopted and which has replaced the executive committee.

 

School Meetings

1. Members of the School Meeting are all academic staff at level B and above who are engaged equal to or greater than 50% FTE.  Observer status is given to all other staff in the School.
2. School Meetings are chaired by the Speaker of the School Meeting, who is chosen by the Head of School. The Speaker is a Member of the School Meeting who is not a Professor nor a Chair of one of the Committees nor the Head of School.
3. School meetings shall be held at least twice every semester during the academic year. Additional meetings may be called by the Head of School  or at the written request of twenty-five percent of the Members of the School Meeting. One-half the Membership of the School Meeting constitutes a quorum.
4. Meetings shall be conducted in accordance with Robert’s Rules of Order. Minutes of the meeting and reports submitted to the Meeting shall be kept and made available to the Members.
5. The initial Agenda for regular School Meetings shall be prepared by the Speaker and circulated in written form at least five calendar days prior to the meeting. The initial Agenda includes the items 1. Apologies 2. Confirmation of Minutes of Previous Meeting 3. Reports of Head of School and the Chairs of Committees 4. Workplace Health and Safety 5. Other Business 6. Items added by the Head of School.

 

6. Additional items may be suggested by individual Members and, at the discretion of the Head of School, be added to the agenda for the forthcoming meeting. Alternatively, items may be placed on the agenda by written petition of twenty-five percent of the Members. All such additions to the agenda must occur at least three days prior to the meeting.
7. A simply majority of those present and those sending proxy votes and/or absentee ballots shall decide an issue arising from an item in the initial agenda or an item added at the discretion of the Head of School.
8. A majority above 60% of those present and those sending proxy votes and/or absentee ballots shall decide an  issue arising from the agenda item not described in 7.
9. A majority above 70% of those present and those sending proxy votes shall decide a motion not arising from an issue on the agenda.
10. Proxies may be given from one member to another. Proxies are given in written form to the other member a copy of which must be received by the Speaker three calendar days prior to the meeting. Proxies cannot be specific to particular items on the agenda nor to a particular motion/amendment not arising from the agenda.

 

 

 

Did the University of Queensland suppress a study?

Possibly and so I am putting the question out there in the hopes a journalist might investigate.

But first some context. In 2013, Redzo Mujcic and Paul Frijters (a frequent blogger here) published a study demonstrating unconscious discrimination on the part of bus drivers in Brisbane. Today, Ian Ayres took to the New York Times to promote the study’s findings.

As they describe in two working papers, Redzo Mujcic and Paul Frijters, economists at the University of Queensland, trained and assigned 29 young adult testers (from both genders and different ethnic groups) to board public buses in Brisbane and insert an empty fare card into the bus scanner. After the scanner made a loud sound informing the driver that the card did not have enough value, the testers said, “I do not have any money, but I need to get to” a station about 1.2 miles away. (The station varied according to where the testers boarded.)

With more than 1,500 observations, the study uncovered substantial, statistically significant race discrimination. Bus drivers were twice as willing to let white testers ride free as black testers (72 percent versus 36 percent of the time). Bus drivers showed some relative favoritism toward testers who shared their own race, but even black drivers still favored white testers over black testers (allowing free rides 83 percent versus 68 percent of the time).

The study also found that racial disparities persisted when the testers wore business attire or dressed in army uniforms. For example, testers wearing army uniforms were allowed to ride free 97 percent of the time if they were white, but only 77 percent of the time if they were black.

Wow. That’s quite a result and certainly the sort of thing we want our social scientists to be doing. No wonder Ayres raised it in the NYT. I did wonder, therefore, why I hadn’t heard much about it.

A possible answer came from Ian Ayres in a follow-up post at Forbes.

Professors Mujcic and Frijters deserve our thanks for authoring a study that is not only illuminating about what white privilege means.  But their employer, the University of Queensland, has not thrown them a parade.  After the City of Brisbane complained that the study encouraged fare evasion, the University initiated a complaint process against Professor Frijters and has ordered the authors to suppress this important paper.  Blessed are those who are persecuted for righteousness sake.  Instead of being persecuted, the authors should be praised for offering us a model for civil rights testing in the new millennium.

Now that is some allegation. If it is true it is shocking to an incredible degree. Not just that the City of Brisbane complained to the University but that the University, my alma mater, actually went so far as to suppress a paper.

I did a quick — but hardly investigative search — to see what this might all be about but didn’t come up with anything. But I think a response at the very least from UQ is required.

An MYEFO mystery: what’s with the resource tax?

It’s the time of the mid-year Economic Fiscal Outlook (MYEFO) and we’re told that we’re about 11 billion deeper in the red this financial year than we thought, with the treasurer blaming the dropping iron price and the reduced wage growth. I have gone over the MYEFO documents (which are an exercise in obfuscation if ever I saw one), found that wage growth and the dropped iron ore price would ‘only’ cost us 2.3 billion each in this financial year (2014-2015), noted that this was far short of the 11 billion headline, and thus went looking for the ‘real story’.

This threw up the mystery of the resource tax. Here is what it says on table 3.2:

Table 3.2: Impact of Senate on the Budget (underlying cash balance)
Estimates Projections
2014‑15 2015‑16 2016‑17 2017‑18 Total
$m $m $m $m $m
Impact of decision taken as part of Senate negotiations(a)
Repeal of the Minerals Resource Rent Tax and related measures -1,684 -2,334 -1,670 -947 -6,634

which seems to means that the repeal of the minerals resource rent tax (and related measures) is costing us around 2 billion per year. Yet, in the ‘Overview Part’, the MYEFO says “The repeal of the Minerals Resource Rent Tax and other related measures will save the budget over $10 billion over the forward estimates and around $50 billion over the next decade.”.

What is going on?

Update (thanks Chris Lloyd): it seems to be a language issue. Part of the story seems to be that the MYEFO is counting the repeal of the mining tax, which was an election promise, as something the Senate inflicted on the budget, so the 2 billion a year is ‘revenue foregone’. So the MYEFO is blaming the Senate for the outcome of an election promise, using an odd formulation to say that the repeal will save us 50 billion when it seems to imply it would cost us 50 billion. Weird.

How to lie with statistics: the case of female hurricanes.

I came across an article in PNAS (the Proceedings of the National Academy of Sciences) with the catchy title ‘Female Hurricanes are deadlier than male hurricanes’. It is doing the rounds in the international media, with the explicit conclusion that our society suffers from gender bias because it does not sufficiently urge precautions when a hurricane gets a female name. Intrigued, and skeptic from the outset, I made the effort of looking up the article and take a closer look at the statistical analysis. I can safely say that the editor and the referees were asleep for this one as they let through a real shocker. The gist of the story is that female hurricanes are no deadlier than male ones. Below, I pick the statistics of this paper apart.

The authors support their pretty strong claims mainly on the basis of historical analyses of the death toll of 96 hurricanes in the US since 1950 and partially on the basis of hypotheticals asked of 109 respondents to an online survey. Let’s leave the hypotheticals aside, since the respondents for that one are neither representative nor facing a real situation, and look at the actual evidence on female versus male hurricanes.

One problem is that the hurricanes before 1979 were all given female names as the naming conventions changed after 1978 so that we got alternating names. Since hurricanes have become less deadly as people have become better at surviving them over time, this artificially makes the death toll of the female ones larger than the male ones. In their ‘statistical analyses’ the authors do not, however, control adequately for this, except in end-notes where they reveal most of their results become insignificant when they split the sample in a before and after period. For the combined data though, the raw correlation between the masculinity in the names and the death toll is of the same order as the raw correlation between the number of years ago that the hurricane was (ie, 0.1). Hence the effects of gender and years are indeed likely to come from the same underlying improvement in safety over time.

Using the data of the authors, I calculate that the average hurricane before 1979 killed 27 people, whilst the average one after 1978 killed 16, with the female ones killing 17 per hurricane and the male ones killing 15.3 ones per hurricane, a very small and completely insignificant difference. In fact, if I count ‘Frances’ as a male hurricane instead of a female one, because its ‘masculinity index’ is smack in the middle between male and female, then male and female hurricanes after 1978 are exactly equally deadly with an average death toll of 16.

It gets worse. Even without taking account of the fact that the male hurricanes are new ones, the authors do not in fact find an unequivocal effect at all. They run 2 different specifications that allow for the naming of the hurricanes and in neither do they actually find an effect unequivocally in the ‘right direction’ (their Table $3).

In their first, simple specification, the authors allow for effects of the severity of a hurricane in the form of the minimum air pressure (the lower, the more severe the hurricane) and the economic damage (the higher, the more severe the hurricane). Conditional on those two, they find an insignificant effect of the naming of the hurricanes!

Undeterred and seemingly hell-bent to get a strong result, the authors then add two interaction terms between the masculinity of the name of the hurricane and both the economic damage and the air pressure. The interaction term with the economic damage goes the way the authors want, ie hurricanes with both more economic damage and more feminine names have higher death tolls than hurricanes with less damage and male names. That is what their media release is based on, and their main text makes a ‘prediction graph’ out of that interaction term.

What is completely undiscussed in the main text of the article however is that the interaction with the minimum air pressure goes the opposite way: the lower the air pressure, the lower the death toll from a more feminine-named hurricane! So if the authors had made a ‘prediction graph’ showing the predicted death toll for more feminine hurricanes when the hurricanes had lower or higher air pressures, they would have shown that the worse the hurricane, the lower the death toll if the hurricane had a female name!

The editors and the referee were thus completely asleep for this pretty blatant act of deception-by-statistics. Apparently, one can hoodwink the editors of PNAS by combining the following tricks: add correlated interaction terms to a regression of which one discusses only the coefficients that fit the story one wants to sell; then make a separate graph out of the parameter one needs in the main text, whilst putting technically sounding information in parentheses to throw editors, reviewers, and readers off the scent.

And the hoodwinking in this case is not small either. In order to accentuate what really is a non-result, the authors in the main text claim that “changing a severe hurricane’s name from Charley (MFI=2.889, 14.87 deaths) to Eloise (MFI=8.944,41.45 deaths) could nearly triple its death toll.” This, whilst in the years since 1979 the average death toll for their included hurricanes is 16 for both ‘female hurricanes’ and 16 for ‘male hurricanes’ (own calculations)! The authors conveniently forgot to mention in their dramatic result that Charley would have had to have been a hurricane that did immense economic damage but that had a very high minimum air pressure, ie was actually a very weak hurricane. Only for such an ‘impossible hurricane’ would their own model predict the increase in deaths from a female name. Put differently, I could have claimed that if the hurricane was very strong in terms of low air pressure, that changing the name from Charley to Eloise would have halved the death toll!

The authors also quite willingly pretend to have found things they have not in fact researched. They thus write “”Feminine-named hurricanes (vs. masculine-named hurricanes) cause significantly more deaths, apparently because they lead to a lower perceived risk and consequently less preparedness”” and the conclusions even speak of “gender biases”! Where do they try and measure this supposed bias in actual preparations? You guessed it, nowhere. PNAS should really clean up its act and not allow this sort of article, with its fairly blatant statistical artefacts, to slip through the cracks.

Let me explain the trickery in a bit more depth for the interested reader: air pressure and economic damage are highly related (the correlation is apparently -0.56), which means that one gets a strongly significant interaction between femininity and economic damage only because one simultaneously has added the interaction with minimum air pressure. One then talks about the interaction that goes the way one wants and happily neglects to mention the other one. And one needs both interactions at the same time to get the desired result on the interaction between the names and economic damage: without this interaction with minimum air pressure, what you get is a whole shift upwards of the male death prediction and a loss of significance on the interaction term with economic damage. You see this in the ‘additional analyses’ run by the author, in very small font after the conclusions, wherein the whole thing becomes insignificant for the first period and the reduced coefficient for the later period on the interaction with air pressure coincides with a halving of the coefficient on the interaction with economic damage as well. Hence, without including both interactions you would probably get that the female hurricanes are predicted to be less deadly than the male ones when the economic damage is small and more deadly when the damage is large (to an insignificant extent). So you need the interaction that is almost invisible in the main text and the conclusions to ‘get’ the result that the headlines are based on.

There is another, even more insidious trick played in this article. You see, with only 96 hurricanes to play with, which really only includes 26 to 27 ‘male’ hurricanes, the authors are asking rather a lot from their data in that they want to estimate 5 parameter coefficients, three of which based on names. If you then only use a simple indicator for whether or not a hurricane has a male name, you have the problem that you don’t have enough variation to get significance on anything.

So what did the authors do? Ingeniously, they decided to increase the variation in their names by having people judge just how ‘masculine’ their names were. Hence many of the ‘female’ hurricanes were ‘re-badged’ as ‘somewhat male hurricanes’. So the female hurricanes of the pre 1979 era had an average “masculinity index” of 8.42, whilst those of the new post-1979 era had an average of 9.01. Simply put, according to the authors the female hurricanes ‘of old’, which were of course more deadly as they occurred earlier, were also more masculine, contributing to the headline ‘results’.

Supposedly masculine female names included “Ione”, “Beulah”, and “Babe”. And who judges whether these are masculine names? Why, apparently this was done by 9 ‘independent coders’, by which one presumes the authors meant colleagues sitting in the staff room of their university in 2013! Now, even supposing that they were independent, one cannot help but notice that the coders will have been relatively unaware of the naming conventions in the 1950s and 1960s. How is someone born in 1970 sitting in a staff room in 2013 supposed to judge how ‘masculine’ the name ‘Ione’ was perceived to be in 1950? These older names probably just sounded unusual and hence got rated as ‘more probably male’. Similarly, it is beyond me why ‘Hugo’ would be rated as less masculine than ‘Jerry’ or ‘Juan’.

The authors’ own end-notes called ‘additional analyses’ indeed show that you get insignificant results without this additional variation begotten from making the names continuous. So the authors need to fiddle with the names of the hurricanes, pool two eras together whilst not controlling for era, and add two strongly correlated and opposing interaction terms in the same analyses to get the results they want. It is what economists refer to as ‘torturing the data until it confesses’.

Finally, for the observant, there is the following anomaly telling you something about the judgements made in this research: the masculinity of names is judged on a 1 to 11 scale (only integers) by 9 raters. Yet the averages reported in the authors’ appendices include such values as 1.9444444 (Isaac) and 9.1666666 (Ophelia). Note that if it were true that there were indeed nine raters, then all values should be an exact multiple of one-ninth, ie 0.11111111. The discrepancy indicates that either there were not always nine raters, or else that not all coded values were integers (an impossibility according to the main text). The 9.16666 for instance is a multiple of one-sixth and thus suggests only 6 rates were used for ‘Ophelia’. the 1.9444444 is a multiple of one-eigteenth, suggesting that there were twice as many raters for ‘Isaac’. Alternatively, in both cases, there were nine raters but one of the nine raters picked two values simultaneously (one even and one uneven) and thus added 0.055555 to a multiple of one-ninth in the displayed average. It is not a big thing as this kind of judgement is made all the time but I can’t find the footnote that owns up to this in the paper.

Predictions versus outcomes in 2013?

In the last 5 years, I have made a point of giving clear predictions on complex socio-economic issues. I give predictions partially to improve my own understanding of humanity: nothing sharpens the thoughts as much as having to actually predict something. Another reason is as a means of helping my countries (Australia/the Netherlands) understand the world: predicting socio-economic events is what scientists are for!

Time to have a look at my predictive successes and failures over the last few years, as well as the outstanding predictions yet to be decided. Let us start with what I consider my main failure.

                 Failed predictions

The main area I feel I haven’t read quite right is the conflict in Syria, as part of the general change in the whole Middle East. I am still happy with my long-run predictions for that region, where I have predicted that urbanisation, more education, reduced fertility rates, and a running out of fossil fuels will lead to a normalisation of politics in a few decades time. But at the end of 2012 I was too quick in thinking the Syria conflict was done and dusted. To be fair, I was mainly following the ‘intrade political betting markets’ which was 90% certain Assad would no longer be president by the end of this year, but the prophesised take-over of the country by the Sunni majority has not quite happened. The place has become another Lebanon, with lots of armed groups defending their own turf and making war on the turf of others. The regime no longer controls the whole country, but is still the biggest militia around.

What did I fail to see? I mainly over-estimated the degree to which the West would become involved. I expected the Americans and the Turks to put a lot of resources into the more secular militias, giving them training grounds and more modern equipment. As far as I can tell, this did happen a bit, but simply not to the degree I thought likely, and I don’t really know why. There were several attempts by the US and Turkey to identify an ‘opposition coalition’ to then support, so something hidden from view must have prevented actual support. Perhaps the US has decided it prefers Assad to the alternatives after all.

The willingness of the Iranians and Russians to support the regime has also been stronger than I thought, and the efforts of the Sunni-neighbours to support the non-regime militias have been less cogent than I thought: instead of backing a clear group that had a real future in terms of leading the country (the more secular groups), foreign anti-regime support came mainly for the crazies who went along with the ideology of fanatics elsewhere. That suggests a lack of pragmatic involvement from the neighbours.

I wouldn’t call it a complete predictive failure because Syria as a country no longer exists: it now does have all kinds of regional power brokers and so one could ‘claim’ the regime indeed has lost (most of) its power, but the conflict has gone on longer than the betting markets that I went along with predicted. So this also educates me about the lack of intellectual weight to that kind of political betting market: these are probably more feel-good markets with low turnover that simply don’t aggregate much hidden information. As a related failure, I can mention that I put a low probability on the event that the Muslim brotherhood would overplay its hand when in government in Egypt. I did mention the possibility (see later), but didn’t think it would happen.

 

                Successful predictions

A very recent prediction of mine was on bitcoins. A month ago, I said governments were going to intervene because of the money laundering opportunities in the bitcoin network, and that it hence would not become a dominant trading currency. The next week, the Chinese came down with severe restrictions on bitcoins in their country: financial institutions were not allowed to trade in it and individuals trading in it had to register with their real names, killing off most laundering opportunities. As a result, the value of the bitcoins halved. I wouldn’t claim bitcoins are quite dead yet. It is when many other countries start to enact similar regulation (as some are doing) that it becomes an official curiosum.

Other predictions have been on various aspects of the GFC in Europe. I predicted such things as the Greek defaults when European governments were still pretending they would not occur, the survival of the Euro when there was lots of speculation on imminent euro exits, the inability of the ECB to actually meaningfully monitor banks, and the failure to get agreements on tax evasion (which have all been painfully clear in 2013).  My proudest moment was to predict in December 2011 the overall trajectory of where the politics of the financial crisis was heading: support for weak new institutions in exchange for continued bailouts and forms of money printing, with national sovereignty as the sticking point preventing stronger institutions. We are still on that trajectory now, as this very recent report by the Bruegel Foundation argues which dryly summarises recent events: “Five years of crisis have pushed Europe to take emergency financial measures to cushion the free fall of distressed countries. However, efforts to turn the crisis into a spur for “an ever closer union” have met with political resistance to the surrender of fiscal sovereignty. If such a union remains elusive, a perpetual muddling ahead risks generating economic and political dysfunction.” The latest banking deal fits this mould perfectly.

I am also proud of my predictions on the ill-fated Monti-government in Italy of 2012. Before he was in power, I predicted he was unlikely to have the personality to change anything, and within weeks of him in government (December 2011) I mentioned the reforms he was talking about were dead in the water, months before the magazine The Economist still put him up as a great reformer. Only in 2013 did mainstream media outside of Italy wake up to his failure. I am similarly looking good on my observations regarding the problems in Spain.

On the Middle East, in 2011 I picked the current Lybian chaos coming from its resource curse. A few weeks into the Arab spring I predicted the ensuing grand coalition in 2012 between islamists and the military in Egypt, whereby the islamists would form government but with a tacit agreement with the military not to interfere with the economic interests of that military. I also predicted that the torture machine of the Egyptian military would first deal with the urban youth and then become oriented towards the islamists should they step out of line, which they did.

The main prediction I have been making since 2007 (and which has gotten me into the most trouble!) is the uselessness of looking for a world coalition to reduce CO2 emissions, mainly because the temptation to free-ride is irresistible both within countries and between them. I have thus consistently called to forget about emission strategies and to instead think of technological advances, geo-engineering and adaptation. In each year since 2007, the developments have been accordingly: steady increases in actual emissions with a growing number of scientists and research groups thinking more seriously about geo-engineering: previous agreements on emissions have not been kept and new ones are toothless, whilst you get many beautiful political speeches designed for consumption by the gullible during each new conference on the issues.

In 2013 for instance, the Japanese reneged on their earlier Kyoto promises because they decided to switch from nuclear to fossil, following on from a previous reneging by Canada. Similarly, the EU watered down its commitments in order not to upset the German car industry, whilst China and India and others helped prevent emission agreements with any bite. A nice write-up of the recent Warshaw talk-fest can be found here.  Conspicuous in that write-up is the increased awareness of the importance of adapting to climate change, and the degree to which hope lies with new technology, not massive emission reductions under existing ones. The Australian deal with the EU trading scheme, which was all smoke-and-mirrors anyway, has fallen through, essentially replaced with a policy of ‘business as usual till the bigger players come up with a plan’, which I see as a sensible policy for Australia at the moment.

 

                Predictions on the ledger

In many ways, the ‘emission controls are hopeless’ prediction is a running prediction for decades, so that one is very much still on the ledger. And one in which I am quite willing to bet against those who say they believe serious emission reductions will come about via emission markets or other controls.

Another prediction coming ‘half-good’ recently is the bet with Andrew Leigh on happiness and incomes in rich countries, where my prediction was that richer countries getting even richer would not get happier. For the data we agreed to look at it, this indeed held, but more because I got lucky with the data available – other data showed different results. Read about it in my recent blog on the topic by following the link!

Another prediction ‘on the ledger’ is that there is going to be no real change in Chinese politics till several years after they run out of easy growth opportunities, say 20 years from now. After that, I predict stronger and stronger pressure to adopt a Western-style political system from the Chinese business community. I gave a possible trajectory for how it might happen (local experimentation growing into national systems), but that is not the only way change might happen, if it happens at all. The prediction is the consolidation of the one-party rule till years after the growth has levelled off. That consolidation has indeed been in full swing this last year: as a recent piece of the Institute of Peace and Conflict Studies argues, in 2013 we got more media control and control over the economy by the party. Still, there are some embryonic signs of attempts to get some kind of separation of powers in that country, such as via more independent judiciary and financial institutions.

The prediction that the ‘behavioural genetics’ crowd is going nowhere soon is also a prediction ‘on the ledger’. The same goes for the prediction that Australia is not going to seriously improve its education-for-the-masses anytime soon, and the unlikelihood of solar replacing fossil fuel for mass electricity-generation anytime soon.

There is then a whole heap of predictions that I am quite happy to say have come true, but where it is also a certainty someone else would disagree. For instance, I predicted that the Melbourne Model, which is a change in how the University of Melbourne structures undergraduate education, would lead to dumbed-down degrees. Everything I hear about that place confirms it, but I would be astounded if the chancellery of the University of Melbourne would agree with that assessment! Similarly, my stated fears regarding the Gonski reforms (not quite predictions as I made it clear I had a hard time finding out what was actually going to happen) are looking all-too-true, but I am sure the ministries involved would disagree. One can trawl my archives for several more such ‘debatable’ prediction outcomes.

Finally, I have a bet on with Conrad Perry for what is going to happen in Egypt next. My prediction is that the next elected government will again be an islamist-lead government, a kind of Brotherhood 2.0. They may change labels and be even more careful, but I thought it likely that they would be involved as a dominant player in the next elections simply because of the high level of religiosity in that country. Conrad Perry bets on ‘all other outcomes’ with a bottle of red to the winner. Jim Rose also made an implicit prediction, which is that the new generation of military are going to be successful in their bid to monopolise power in Egypt, but he didn’t bet anything. Still, Jim is looking rosy on that prediction.

The prediction+bet with Conrad on Egypt was entered into around August/September and things have moved on a bit since then. The Egyptian military has proven more popular and bent on total control than I thought, but we are still looking at a situation in which one is likely to get democratic elections (though the military might well rig them). I will say I am less confident about my prediction now than 3 months ago, essentially because the military has been more brutal than I thought they would be, but there is still a chance for my prediction to happen so I am not ready to concede defeat on that one yet!