Real action heroes don’t justify

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The doctrine of double effect has bugged me for some time. It probably doesn’t help that double effect is usually tagged as Catholic, and in that connection we have Blair’s Catholicism … and Iraq … and the self-exculpatory speechifying, and now the middle east peace envoy business. Double effect: it’s all mixed up in there somehow. Obviously I’m not going to like it.

But what’s going on with double effect anyway? Roughly, it’s a doctrine that says we can make a distinction between actual effects on the basis that not all effects were intended, even if all effects were correctly predicted. Hence, someone who in a single act brought about both a good effect and a bad effect may be excused if:

(1) He or she intended the good effect and not the bad effect, and;

(2) The resultant good effect did in some way compensate for the bad effect.

A double effect advocate who wants to finesse things might add that the bad effect mustn’t precede the good effect in a causal chain. There’s potential for fuzziness here, but what makes double effect unattractive isn’t some difficulty with causation. If the doctrine of double effect is going to be your guide in deciding whether or not to do something, you’re first going to have to work out who will judge what, and when. On condition (1) above, seemingly the actor carries a special burden of judgement: he or she must single out and focus on a good effect, so as to intend it. Whatever ‘intending’ involves, surely no one else can do it but the intender. But on condition (2) above, it’s not at all clear how the judgement of the good compensating for the bad is to be made. Is it the actor who gets to make this judgement, or his or her peers? A government agency? A court of law? And when do they get to judge? The doctrine doesn’t give us criteria for deciding this. It’s not interested.

Of course, other people (neighbours, end users, professionals) do tend to take an interest, depending on what’s proposed. To take Chris Bertram’s example from the recent thread about this on Unspeak: let’s say that you, as an adherent of the doctrine of double effect, propose a bridge-building project. You expect some people will die, but to have a connection from here to there will be good, and it’s the connection you intend, so you proceed. Except that you don’t, because most places with governments exercise oversight of anything larger than the construction of a hen house. You say: ten people will (likely) die building my bridge. The government, in response, says: this bridge (a revised design) is better because although there’ll be one successful and two attempted suicides over the next fifty years, no one will die during construction. Build this bridge instead. The burden for deciding (2) has been taken on by the state, on behalf of interested parties. Additionally, even though the burden for acting in accordance with (1) officially remains with the actor, his or her options are more likely than not shaped by the presence of an outside interest. After all, society, insofar as it can be said to want something, wants us to think of good effects, not bad ones. The upshot? An agent who invites the views of others in an effort to satisfy (2) limits the agency implied by (1).

In short, the doctrine of double effect tends to offer itself as a doctrine for moral lone rangers. My personal finding is that in most cases where heavy moving is planned, there’s a happier result when advice of parties with an interest is actually followed. Just ask; it might even be the law. Even if it’s not the law, it’s likely that someone cares. For bridge-building, seek advice from engineers (and the neighbours). For bombing, seek advice from air force generals (and the bombed).

AFOE nominated for Best Business Blog

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Even though AFOE is not really a business blog, our recent and extensive coverage of the financial crisis seems to have earned us a nomination for Best Business Blog at the 2008 Weblog Awards. If you, like Paul Krugman among others, appreciate the hard work done by our authors, I invite you to cast your vote for us by clicking on the pic or by going here.

You can also cast your vote for a few other great European weblogs, like Kosmopolito and good old Nosemonkey.

PS: A big thank you to the reader(s) who nominated us!

Russian Industry Heads For Poll Position As The Downhill Stretch Of The Tourmalet Extends Itself Before Us

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Well as far as I can see, in this the great second depression cycling race, we now have a small breakaway “peloton” formed out there in front as we struggle to reach the Tourmalet summit, with teams from Germany, Spain, China , Russian and even Ukraine all elbowing furiously away one with another, in an attempt to snatch the yellow jersey from its current holder – Japan. But wait! A little way behind them I can now discern another, more densely packed, group, although I can scarcely make out one rider from another such is the cloud of dust thrown up by the power and fury of their effort, although from the little I can make out they do appear to be lead by “gregarios” hailing from the United States and the UK, and, no doubt about it, they do seem to be closing fast.

Yet as things stand as we go to press, one of the primary contenders for this most unusual and most meritless of awards must surely come from this years very strong Russian contingent, and it therefore shouldn’t surprise us at all to find that Russian manufacturing shrank at what was a country-specific record pace in December, with sharp drops in both foreign and domestic demand producing widespread production and job cuts, according to the latest PMI report from VTB Bank Europe.

VTB’s Purchasing Managers’ Index contracted for what is now the fifth consecutivemonth to 33.8, from 39.8 in November. This brings Russia swerving into line with Japan (30.8), Spain (28.5), Germany (32.7) and China (41.2) Russian manufacturing is, in fact, now contracting more rapidly than it did at any time during the 1998 economic collapse, when the government had to abandon its support for the ruble and ended up defaulting on $40 billion of domestic debt.

The malaise is general, and Russia’s RTS Index fell by 72% in 2008, making it the worst performing stock index among the world’s 20 biggest equity markets . The ruble has also been falling, and lost 15 percent against the central bank’s dollar-euro currency basket during 2008. The central bank has also now used 27 percent of its foreign-currency reserves, which are still the world’s third-largest, trying to prevent an overly dramatic devaluation of the ruble. Reserves were down to $438.2 billion by the end of the year, and more than $200 billion has left the country since the August invasion of Georgia, according to estimates at BNP Paribas.

So the position in Russia is bad, of that there is little doubt, but could Russia really take over the batton from Japan, and lead the global economy downwards, surely this assertion is exaggerated, I mean it wasn’t so long ago that they were growing at 7%, was it? Well exactly, the downturn in Russia is extraordinarily sharp (as it is in China), which is what makes the position so dramatic really, oil is down, manufacturing output is down, and a sharp credit crunch has consumer demand in the “throttle” position. Let’s look at some of the recent macro data. Continue reading →

Everything But The Sky Falls-in On Spain

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Well, these are not easy times for those who are economically active in Spain, and doubly not-so when many of those with money to spend over the holiday season decide to take advantage of the cheap pound and go and spend it over in the UK (in fact in this Somerset village they are already accepting one euro for one pound sterling). But this is only the tip of the iceberg and, as we will see below, retail sales inside Spain are now steadily falling by the month, with no reversal to this trend anywhere in sight. Not this year, not next year, and probably not the one after either.

But first off, lets start with the news of the moment, Spain’s falling (or could we say disappearing?) industrial output. Continue reading →

December’s JPMorgan Global PMI Shows Just How Far The Infection Has Spread

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OK, so now here’s the chart you really need to see (below). The JPMorgan Global Manufacturing PMI hit 33.2 in December, a series record. More to the point you can get a comparison between what is happening now and the 2001 “recession lite” with only a swift glance, and, of course, the 2009 long recession is only just getting started.

Now let’s stick it alongside the one Paul Krugman put up last week of the US Great Depression:

Now, arguably, what we can see here is that the current collapse in industrial activity is starting to get near the US historic one in terms of proportions, but we still aren’t quite there yet. What we could note that JP Morgan in their monthly report suggest that the present rates of output are equivalent to an annual fall of between 12% and 15%. Really to compare with the fall in the US we need to get up into the 20% region, but remember the global index is based on an average for 26 countries, and some of these are much worse than others (Japan, Spain, possibly Russia) and will already be around the 20% annual contraction rate in December. The point is also that the situation is still deteriorating, so hang on a bit, since it is not at all excluded that we will hit a 20% annualised contraction rate for the whole aggregate 26 sometime during the first quarter.

“The second half of 2008 has been dreadful for global manufacturing and the sector enters the new year mired in its deepest recession for decades. Manufacturing will therefore continue to weigh on world GDP figures, with December PMI data consistent with a drop in global IP of around 12%-15% saar as indexes for output, new orders and employment slumped to record lows.”

“The weakest performance was registered by Japan, whose output and new orders indexes fell to levels unprecedented in the histories of any of the national manufacturing surveys included in the global manufacturing PMI.”

“Employment fell for the fifth successive month in December, and to the greatest extent in survey history. All of the national manufacturing sectors recorded a drop in staffing levels, most at series-record rates including all of the Eurozone nations, China and the UK. The sharpest falls in employment were signalled for Denmark, Spain, the US, Russia and the UK.”

And watch out for the deflation backslap:

“The Global Manufacturing Input Prices Index posted 31.3, its lowest ever reading. The rate of deflation was especially marked in the US, were purchase prices fell to the greatest extent since June 1949. Rates of decrease in costs hit series records in the Eurozone, Russia, Switzerland, the Czech Republic and Denmark.”

And for those of you who are still sceptical that any of this has any validity, here’s a PMI/GDP comparison chart for Japan – GDP rates to the left, diffusion index PMI readings to the right (click over image if you can’t view too well). Not perfect, but not a bad guide I would say, if you like your football live, that is.

So never mind the depth, what about the duration? Well that is where I think that all of this will differ from what happened back then. As you can see in the US Great Depression Chart the 20% annual decrease went on for several years. At the present time I think there is no reason to assume that this will happen, ie that we will keep getting massive year on year contractions (in some cases maybe, Latvia perhaps?????), but activity does look set to fall to quite a low level, and there is no strong reason at present for believing it will simply bounce back up again. More than likely we will simply trawl the bottom, at least for some months, and who knows, maybe a couple of years.

Well that’s it for the big picture stuff, but I have actually been pretty hard at it all day down at the individual country level, so there is plenty more detail to come. In the next post.

The Second Great Depression Wends Its Way Forward in December

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And lands in China.

Well China isn’t quite in Great Depression mode yet, but manufacturing activity – which forms the core of the Chinese economy and accounts for 43% of all activity – is already very close to a technical recession, and phew, it wasn’t very long ago that the Chinese economy was registering double digit growth. So the turn around is gigantic. The “close to technical recession in manufacturing industry” call comes from the people over at CLSA Asia-Pacific Markets, who compile the China purchasing managers index, and they base their judgement on the fact that their Chinese manufacturing index has now been registering contraction for five consecutive months. Continue reading →

The curse of Cheney

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Dick Cheney in Azerbaijan 3 months ago —

And we support the people of Azerbaijan in their efforts, often in the face of great challenges, to strengthen democracy, the rule of law, and respect for human rights, and to build a prosperous, modern, independent country that can serve as a pillar of moderation and stability in this critical part of the world.

Meek US State Department statement issued on a slow news day, 30 December —

We deeply regret Azerbaijan’s decision not to renew the broadcasting licenses of Radio Liberty, Voice of America and the BBC. These media organizations play a crucial role in supporting democratic debate and the free exchange of ideas and information. This decision, if carried out, will represent a serious setback to freedom of speech, and retard democratic reform in Azerbaijan.

We remain committed to working with the government of Azerbaijan to find the proper legal framework within which these radio and TV broadcasts can continue.

This came just over a week after the USA had made Azerbaijan eligible for tariff concessions on its exports to the USA — the kind of thing that can be revoked from African countries if they are judged to have regressed on political pluralism.  It’s as if there’s something special about Azerbaijan that trumps such concerns.

Ukraine kicks to touch on gas crisis

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The Wall Street Journal (subs. req’d) is reporting that Ukraine is to settle the $2 billion debt to Gazprom via loans to the public gas company Naftogaz from two state-owned banks.  As Edward explained a few days ago, the gas debt is one of the open wounds of the economic crisis in Ukraine, with many questioning whether stabilization is possible with the huge gas debt unresolved.  And this solution really does nothing to resolve it.  The debt is now just shifted from Naftogaz to the state banks, and none of the ideas to put the gas transactions on a more sustainable path (e.g. by raising transit fees for gas destined for the EU) have been pursued.  Perhaps it’s another sign of the political paralysis.  But it’s not clear that the IMF will be amused by this nine zeroes debt juggle.

UPDATE: It seems that reports that the payment would resolve the latest Russia-Ukraine dispute are premature.  Naftogaz appears to have made a transfer to Gazprom that did not include “late fees” and deducted $100 million.

The face of Russian nationalism anno 2008

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One of the top three faces that define Russia. By popular vote. Fair enough, I suppose:

The Kremlin in the Putin era has often sought to maintain as much sway over the portrayal of history as over the governing of the country. In seeking to restore Russia’s standing, Mr. Putin and other officials have stoked a nationalism that glorifies Soviet triumphs while playing down or even whitewashing the system’s horrors.

As a result, across Russia, many archives detailing killings, persecution and other such acts committed by the Soviet authorities have become increasingly off limits.

Bonus link (added 29th): the whitewashing of Stalin in the West and a nice quote by a reader of this BBC article:

I cannot help to think that the fact that Stalin was mostly bad to his own people and that his policies actually weakened his own country had something to do with the fact he is mildly looked upon in the West (compare this to Hitler who brought destruction to everyone else’s doorstep). No doubt that if Hitler was an ally of Britain and had restricted his genocide to within Germany, his crimes would have been swept under the carpet by the British press for the benefit of the greater good.