What Comes After Failed Global War on Drugs?

 "Our insatiable demand for illegal drugs fuels the drug trade...[c]learly, what we have been doing has not worked and it is unfair for our incapacity...to be creating a situation" - Hillary Clinton.

Americans have obviously inflicted hardships on the rest of the world with next to no concern about others' well-being. Militarization in the "War on Terror," for instance, has polarized many and radicalized more than a few who would otherwise remain neutral as the United States takes a heavy-handed approach by playing the role of Globocop. Another somewhat lesser-known but equally unsuccessful Yanqui effort has been the "'War on Drugs" as the world's top consumer of hallucinogenics believes that it's a supply-side problem and not a demand-side one as their addled population breeds conflict in Latin America and beyond. Unfortunately, the American policing paradigm remains the world's most influential one. From the US-Mexican border to the hinterlands of Southeast Asia's Golden Triangle, the knock-on effects of American drug addiction are being felt worldwide. 

My erstwhile employer LSE IDEAS has a new report that sheds light on alternatives to the enforcement-based Globocop approach favored by certain North Americans. As I would argue, a lot of the problem stems from the demand-side; not enough Yanquis just say no to drugs as recreational substances and their consumption Stateside is a red, white and blue activity. (Ditto for Western Europeans and other addicted peoples.) Aside from reducing demand, there is also a more science-based approach to weaning these addled folks off their addictions once and for all. We may never cure these endlessly distracted Yanquis of their other addictions to debts 'n' fats, but hey, taking away the needle may mitigate the damage done. Below is the introduction to the LSE IDEAS report, followed by signatures from no less than five Nobel Prize winners in economics as well as our usual cronies. Heck, even Jeff Sachs has signed on for good measure so I guess nearly everyone with a conscience is on board for this effort to address matters on a human scale:

It is time to end the ‘war on drugs’ and massively redirect resources towards effective evidence-based policies underpinned by rigorous economic analysis. The pursuit of a militarised and enforcement-led global ‘war on drugs’ strategy has produced enormous negative outcomes and collateral damage. These include mass incarceration in the US, highly repressive policies in Asia, vast corruption and political destabilisation in Afghanistan and West Africa, immense violence in Latin America, an HIV epidemic in Russia, an acute global shortage of pain medication and the propagation of systematic human rights abuses around the world.

The strategy has failed based on its own terms. Evidence shows that drug prices have been declining while purity has been increasing. This has been despite drastic increases in global enforcement spending. Continuing to spend vast resources on punitive enforcement-led policies, generally at the expense of proven public health policies, can no longer be justified.

The United Nations has for too long tried to enforce a repressive, ‘one-size-fits-all’ approach. It must now take the lead in advocating a new cooperative international framework based on the fundamental acceptance that different policies will work for different countries and regions. This new global drug strategy should be based on principles of public health, harm reduction, illicit market impact reduction, expanded access to essential medicines, minimisation of problematic consumption, rigorously monitored regulatory experimentation and an unwavering commitment to principles of human rights.
-------------------
[signed]

Professor Kenneth Arrow, 1972 Nobel Prize in Economics.
Luis Fernando Carrera Castro, Minister of Foreign Affairs, Guatemala.
Nick Clegg, Deputy Prime Minister of the United Kingdom of Great Britain and Northern Ireland.
Professor Paul Collier, CBE, University of Oxford.
Professor Michael Cox, LSE IDEAS.
Alejandro Gaviria Uribe, Minister of Health and Social Protection, Colombia.
Professor Conor Gearty, London School of Economics.
Aleksander Kwasniewski, President of the Republic of Poland (1995 – 2005).
Professor Margot Light,LSE IDEAS.
Baroness Molly Meacher, UK House of Lords.
Professor Sir Christopher Pissarides, 2010 Nobel Prize in Economics.
Professor Danny Quah, LSE IDEAS.
Professor Dani Rodrik, Institute for Advanced Studies, Princeton.
Professor Jeffrey Sachs, Columbia University.
Professor Thomas Schelling, 2005 Nobel Prize in Economics.
George Shultz, US Secretary of State (1982 – 1989).
Professor Vernon Smith, 2002 Nobel Prize in Economics.
Dr Javier Solana, EU High Representative for Common Foreign and Security Policy (1999 – 2009).
Baroness Vivien Stern, UK House of Lords.
Professor Arne Westad, LSE IDEAS.
Professor Oliver Williamson, 2009 Nobel Prize in Economics.

Is 'Responsible Mining' an Oxymoron?

Like other extractive industries, mining elicits much hand-wringing among leftists about labor exploitation, environmental degradation, and the decimation of indigenous cultures in mining communities. As a more practical sort, I appreciate how mining makes modern life possible, from the computers leftists design their accusatory banners with to the cell phones they use to organize the overthrow of bourgeois capitalist scum with. In urbanized societies, there is a squeamishness about where our food comes from (slaughtering animals) and where the raw materials that make modern life possible come from (mining) since we are removed from these activities. Animals bleed and die. Mounds of earth are dug up and disposed to gather tiny nuggets of copper and gold. Deal with it for it's always been that way as we fill the earth and subdue it. I certainly do not doubt there are flagrant violations of acceptable mining practices here and there, but I am not convinced that there is a real alternative to mining at the present despite all its problems. While bleeding hearts leftists always target big, evil MNCs, it also bears remembering that small-scale wildcat miners tend often get a free pass despite having similarly questionable practices since they are "indigenous."

Just recently, I was sent a notice by Elsevier about a new journal of their focusing just on mining-related issues, The Extractive Industries and Society. Reading the first few articles, there is a definite leftist slant to the submissions. Still, Robin Broad offers a fairly interesting take on the whole idea of "responsible mining." Is it a contradiction in terms, or is it something we can actually achieve? She offers a number of different conceptions of the notion before offering her own:

1. The neoliberal definition - To most corporate mining executives and, alas, also to many government officials, mining is responsible if it focuses on maximizing economic growth which, in turn, maximizes economic profits. The idea is that this formula will work to make everyone better off and in the most efficient way. This, of course, is what neoclassical economic theory tells us. In terms of social benefits, this is deemed ‘‘responsible’’ because the economic benefits will – again, in theory – multiply and trickle down to the poor. In terms of environmental impact, the ‘‘environmental Kuznets curve’’ purportedly proves that, at least in theory, as a country grows in economic terms, certain environmental pollutants decrease.
2. The corporate social responsibility definition - A second use of the term ‘‘responsible mining’’ is a slight variation to the neoliberal definition, with the mining firm stating a clear commitment to that other buzzword: ‘‘corporate social responsibility.’’ Typically, this does not involve changing the production process itself. Rather, the corporation commits to using some of its profits to do something ‘‘good.’’ So, for instance, in the Philippines, the Canadian/Australian mining company OceanaGold has committed to ‘‘responsible mining,’’ a pledge which translates into planting trees at nearby sites, contributing to medical missions, and supporting community programmes in education and other areas.
3. The structuralist definition - A third definition of ‘‘responsible mining’’ focuses on ‘‘responsibility’’ from the perspective of who receives the economic and financial benefits of mining. Just as the first definition builds on mainstream economic theory, this third is modern-day structuralism a` la Raul Prebisch (Prebisch, 1950). Structuralists focus on how to generate maximum economic benefits for the South (be it a specific country or the South in aggregate terms) rather than the North. This ‘‘paradigm’’ of responsible mining focuses on increasing the taxes that corporations pay to the Southern government (or doing away with tax holidays). 
4. The fourth The final definition of ‘‘responsible mining’’ is what, in my view, it should really mean: a more comprehensive notion of economically, environmentally and socially responsible mining. Socially, as I have witnessed in the Philippines, Guatemala, and El Salvador, the presence of mining corporations invariably brings conflict and death to previously peaceful municipalities d consent’’ of local communities, especially before any corporate ‘‘contributions’’ are made to local officials or communities. Environmentally, responsibility involves careful assessment – based on full information and by a knowledgeable and objective party other than the mining corporation – of all possible environmental impacts of the mining. This includes an assessment of the impact of all chemicals proposed to be used in the mining process (typically cyanide used to separate gold from the rock), the toxins released by the mining (for example, arsenic is often released in El Salvador and elsewhere) as well as overall ‘‘acid-rock drainage’’, and the broader environmental impacts and risks. 

It's all quite interesting from the perspective of language games, but I am as always more concerned with action than rhetoric. Then again, you might take a constructivist stance is stating that rhetoric surrounding "responsible mining" actually shapes mining practices.

Why Putin Has Got the Moves Obama Lacks

But would you buy a used car from this guy?

I watched the entire Putin interview yesterday on CNBC from his World Economic Forum wannabe, the St. Petersburg International Economic Forum. This time, the British host Geoff Cutmore did not toss softballs at Putin but asked quite pointed questions about the effects of sanctions on Russia, Russian relations with Ukraine, Putin's seeming hankering for the return of the USSR, and his overall worldview. Dare I say it but Putin was in his element: smiling, smirking and sulking where appropriate as he delivered an astonishing range of one-liners, polemics and put-downs. Definitely, he's got a future on the lecture circuit--or as an inspirational speaker--when he finally retires from politics circa 100 years of age. Mentally and physically, he's at the top of his game.

Today on Yahoo! News, I read the ABC News writeup of the very same event. The summary makes a comparison between Putin and Obama that I found amusing. In terms of sheer machismo, there is of course no contest: Putin is a judo black belt while Obama is a pencil-necked geek (Barack is a lawyer, after all). More to the point, both are economical with the truth and slant it in ways that flatter them.
However, there is a large difference in panache that bears discussing. True Believers in America--you can drink that Kool-Aid elsewhere--are as hip as John Denver and have as accurate a worldview as Dick Cheney. However, slagging America is not enough to make someone stylish since everyone does it (including Americans). You could be a portly weirdo like Kim Jong Un, or a half-wit like Nicolas Maduro for that matter. What Putin does have is moxie--and lots of it.

My favorite moment was when the subject turned to NSA whistleblower Edward Snowden. Like me, Putin probably thinks Snowden is a conniving computer geek prone to abusing his welcome. However, since granting the ingrate Snowden asylum in August of last year, Putin's been setting things up for his rhetorical grand slam, and he duly knocked one out of the park yesterday. Turning around human rights happy talk Yanquis are so fond of, Putin stated Russia hasn't handed Edward Snowden back to the US since it doesn't give up fighters for human rights. I was laffing so hard it hurt. The timing and delivery of Putin's exquisite punch line made putting up with the whiny American traitor Snowden worthwhile.

OTOH, Obama is quite simply a fraud. He has brought his people little hope or change. Overpromise and underdeliver. When Putin speaks he probably thinks to himself: "Tee-hee, I got the delivery of that whopper just right!" It's campy nudge-nudge, wink-wink stuff. Sly and ironic, I tip my hat off to Putin's brand of melodrama. Obama, meanwhile, likely thinks: "If I lie hard enough, they'll believe me...and in America." He's rather po-faced. The latter is duty-bound to Believe In America despite all the apparent contradictions of American exceptionalism. He is of the repeat-a-lie-enough-times-and-people-will-believe-it's-the-truth (including himself) persuasion. Can you really blame Putin for chafing at the paternalism of this Uncle Sam Knows What's Best BS? And of course he has the advantage of not having to live up to citing his country a shining exemplar for the world in the post-Soviet era. 

Besides, Putin probably does not respect those who buy all his rhetorical flourishes and probably rates those who do as suckers. Instead, the discerning will be able to separate the wheat from the chaff and find occasional nuggets of wisdom. Putin offers that the US-led world order has failed, fine by me, but I am unsure whether Putin offers a compelling alternative (or China for that matter). Still, I am not one to doubt that the Yanquis are in large part responsible for the subprime globalization we have been made to endure. Putin also got it spot on in saying the dollar is something we should all move away from since it's bound to only decrease in value in the long run as we are played for suckers.  

In song terms, Obamanite rhetoric has the sophistication of Brooks and Dunn:

Only in America
Dreaming in red, white and blue
Only in America
Where we dream as big as we want to
We all get a chance
Everybody gets to dance

Obama is just like that: dull. trite and hollow. Nevermind that income mobility in the United States is much worse than in many European countries where inequality is lower despite not justifying such unfairness in the name of "rewarding" effort. American hypocrisy knows no bounds. Meanwhile, Putin rhetoric reminds me of The Clash:

Yankee detectives
Are always on the TV
'Cos killers in America
Work seven days a week
I'm so bored with the USA
But what can I do?

Recent drive-by shootings in SoCal, typically senseless American behavior of shooting people at random, remind me of the barbarity of American society hinted at by the late Joe Strummer. They are exceedingly violent people and it literally shows. The question for the rest of the world and Putin is precisely what can we do? We certainly don't want to be like the USA, but I am not sure if we can be like Russia, not necessarily having either the natural resources or the neo-Stalinesque cult of personality to make Putinism work abroad. You certainly may not like him, but there is a drama about him that captivates others' imaginations.

Each of them is a reflection of the societies that produced them. As the saying goes, you get the government you deserve. Obama is a master self-promoter in a society that values self-promotion. Hence its lawyer- and financial speculator-infested culture that handsomely rewards socially unproductive activities. Meanwhile, Putin is stuck between romantic notions of restoring the Soviet Union to its former grandeur and attracting FDI in a neoliberal era--hence the CNBC interview to reassure prospective investors about Russia's political situation. I've pretty much written off the lame duck Obama, but Putin still has some way to go in proving whether he's simply another showboat--witness the wasteful Sochi Olympic Games--or has something more to give. Meanwhile, there is something to be said about enjoying his amusing feints and postures.

This much though I am certain of: Take away Obama's battery of image consultants, speechwriters and spin doctors and I really doubt whether there's any substance to him. Certainly he hasn't done anything for his country as median incomes slide even further post-Dubya and debt increases to previously unimaginable heights. So he's glib and superficial, but so is modern-day America.

5/26 UPDATE: I forgot to point out that there is academic research on Putin's cult of personality and star power that I find highly entertaining if some of the assertions made I am unsure of.

The FT takes on Piketty

The Financial Times headline: Piketty findings undercut by errors.
Update: Piketty responds to the FT.

David Autor on Inequality

From a recent interview of the MIT economist (discussing this article):

Q. You are focused on inequality among the so-called “99 percent,” not between the 1 percent and the 99 percent. Why?

A. There’s a real national debate about the significance and causes of inequality. This public debate is dominated by the discussion of the top 1 percent. And the top 1 percent is important, but focusing on the top 1 percent conveys the message that the game is all rigged, that if you’re not in the elite stratum, there’s nothing to shoot for. And that’s just not the case. The growth of skill differentials among the other 99 percent is arguably even more consequential than the rise of the 1 percent for the welfare of most citizens. 

Here’s a concrete way to see it: The earnings gap between the median college-educated two-income family and the median high school-educated two-income family rose by $28,000 between 1979 and 2012. This [shift] — which excludes the top 1 percent, since we’re focusing on medians — is four times as large as the redistribution that has taken place from the bottom 99 percent to the top 1 percent of households in the same period.

Improving Econ 101

Noah Smith says introductory economics needs to be more empirical. I understand his argument, and have some sympathy with it, but I wonder if the substantial change he seems to be proposing is practical.  Economists usually do empirical work with statistical tools that most college freshmen have not yet learned. 

We teachers of introductory economics can and should explain where and why economists disagree. That is part of helping students develop their critical thinking skills.  But I doubt students are in a position to try to evaluate the competing empirical work that shapes the differing views.

In the end, introductory economics is just that: an introduction to the economist's way of thinking.  That means giving students basic concepts--comparative advantage, supply and demand, market efficiency and market failure--that will make them more perceptive readers of the newspaper.

In Inequality Back to the 1920s Level?

Not really, says Gary Burtless, though some pundits would have you think otherwise.