Twofish's Blog

June 24, 2006

An argument for democracy that you won’t hear from the State Department…

Filed under: china — twofish @ 5:01 am

I have great admiration for the US constitutional system, and I think that there is a lot that China can learn from it. 

One thing that I admire about the constitutional system is how it is reacted to the Bush administration's efforts to override "due process".  It is the unfortunate situation, that the Bush administration has been able to detain people at Guantanamo without trial, but at the same time it is refreshing and comforting to see how the system has fought back against extensive claims of executive authority.  The restrictions on civil liberties that have resulted from 9/11 are unfortunate, but if you look at some of what was proposed immediately after 9/11, they could have been a lot, lot worse.  The case against Jose Padilla was obviously a test case, and had things gone differently in that case, the results would have been very frightening.  Fortunately, the system reacted against it, and it seems pretty obvious that future cases involving US citizens on US soil will likely go through the Federal court system.  Part of the reason this matters to me is that I can imagine some scenarios where without the "due process" protections of the court system, I'd end up behind bars (suppose you end up with anti-terrorist military tribunals + bad relations with the PRC + the non-sense that Wen Ho Lee went through -> I'm in trouble).

What I do find interesting (and important for Chinese constitutional development) is where the resistance has come from.  By and large, it hasn't come from some mass popular uprising, and it's only been in the last few months that the political opposition has made this much of an issue.  Where the main resistance against military tribunals and detention without trial has come from is within the system, from military and civilian attorneys and judges just doing their jobs. The implication that this has for my thinking is that it suggests that if you want to avoid abuse of power, the important thing is not to try to instigate a mass uprising, but rather to strengthen the institutional framework of the judicial system.

Cry Wolf – Comments on Pei Minxin

Filed under: china — twofish @ 4:37 am

Some comments on Pei Minxin's latest article

http://www.taiwansecurity.org/TT/2006/TT-230606.htm

The problem with Pei Minxin's articles is that he has been writing the same article since the mid-1990's if not earlier.  One lists the latest problems in China, states that the Communist Party is incapable of dealing with them, and then predicts a collapse.  

One can argue that may be this time things *are* different, and that the current set of problems are insurmountable.  But one also has to at least entertain the *possibility* that the Chinese Communist Party will deal with the latest set of issues successfully, and then ask what next?

There are a number of problems I have with Pei Minxin's writings. 

The first is the assumption of historical determinism.  What happens next in China is dependent on the choices people make, and one must never underestimate the impact that individual choices make.  I have major problems with any theory of history that doesn't take into account the human element or the random element.

The second is that it is "brittle."  Suppose it becomes obvious in twenty years that a democratic transition is not inevitable, and that it is possible to have a long term stable authoritarian regime (such as Singapore).  Then what?  I don't think that Pei has an answer to that.  My answer is that just because something is possible doesn't make it right.  One can argue that a government that is democratic is just better, and that China should move toward liberalization even if it isn't the only viable option and even if there are costs involved.  The trouble with this is that people (gasp) might disagree, but in trying to resolve these disagreements, one manages to do useful things.

June 22, 2006

Texas Workforce Commission notes

Filed under: Uncategorized — twofish @ 3:21 pm

I get a notice in the mail saying that I didn't pay my unemployment taxes for Twofish Enterprises Inc. I call up the number on the letter. Someone answers the phone. I explain the problem. They are nice and polite and they fix it. Time spent. Less than two minutes.

WOW!!!!!

This isn't an isolated event. All of my dealings with the TWC have been very good. At some point I'd like to meet the person or persons responsible for this.

This actually has some relevance to Chinese industrial restructuring. The standard stereotype is that private industries are good at customer service whereas government agencies are bad, but here is a counter example. TWC good at customer service. AOL bad at customer service.  This suggests that "private ownership" isn't a magic bullet.  Part of what I'm working on is to get things to the point that the main "actors" in a SOE act in ways that are similar to the actors in a "private corporation" when these are good things.
The basic issue is that good customer service is *hard* and *expensive*, and its easy for managers to skimp on since it isn't viewed as a core function. But I'm very interested in the bureaucratic politics that got TWC to the point where it has very good customer service.

June 21, 2006

I want to get out but they pull me back in….

Filed under: china — twofish @ 8:48 pm

Would like to talk less about China, but then I read this silliness

http://chinadigitaltimes.net/2006/06/panda_slugger_soyoung_ho.php 

Two problems

1) You'd think that at high level meetings China would also have translators.

2) I've never thought of Michael Pillsbury as a China hawk.  He has written some of the best analysis of the People's Liberation Army I've seen (look at the Rand Corporation website).  The only thing you need to keep in mind is that a lot of his writings are dated.  How the Chinese leadership  (and for that matter the American leadership) viewed the world in 1998 is very different from how they view the world in 2006.

For that matter, Rumsfeld or any other senior member of Bush administration has ever struck me as much of a China hawk.   When I think of the term "China hawk" I think of Dana Rorabacher, Bill Kristol, Arthur Waldron or Ross Terrill.

Notes on Kristoff

Filed under: china — twofish @ 4:37 am

Nicholas Kristoff posts a lot of good stuff on China, but I think he is a bit off the mark here

http://www.pekingduck.org/archives/003814.php

The logic (he can post things about Falugong) -> (The Communist Party is doomed) has some steps that are missing.

The trouble with this logic is that the Communist Party's power is not based primarily on lack of information, but rather on its control of the coercive instruments of the state.  The Communist Party is corrupt and does nasty things to Falugong.  I'm pretty sure that isn't a surprise to most Chinese, but there is a long distance from "I know that the Communist Party does nasty things" to "I'm going to go out on the street right now and overthrow the government."

And I think that Kristoff misses the purpose of the Parties use of censorship on the net.  It's less to filter out information, than to establish that "big brother is watching."

Suppose you were to read a web page in the United States talking saying "Be at this location for the overthrow the government and get rid of Bush committee which consists of the following people."  The logical assumption is that the people making the page are really anti-Bush, and if you yourself are anti-Bush you'd make contact with these people and get organized.

Now, lets suppose you read a web page in China saying "Be at this location for the overthrow the government and get rid of Hu Jintao committee."  Would you show up?  Would you contact the people that made the web site by e-mail to join the anti-Hu committee?  Of course not.  Since you know that the Chinese government censors the web, your (probably correct) conclusion is that any web page that loudly is anti-government probably shouldn't be taken at face value.  So the existence of censorship keeps people from responding to these posts, and it also keeps people from making these organizing posts in the first place.  This keeps groups that the Party is afraid of "atomized" and incapable of challenging the government.  The fact that the censorship doesn't get every last anti-government post is irrelevant.  It doesn't need to.

June 20, 2006

Notes on Stephen Roach’s blog

Filed under: china, finance — twofish @ 3:25 pm

http://www.morganstanley.com/GEFdata/digests/20060619-mon.html#anchor0

(One pet peeve on Roach's comments. The 'big four banks' aren't policy banks.)
The problem that I see in his blog is that it's hard for me to figure out what he is suggesting Chinese authorities do, right now. I agree that in the time scale of one to three years, it is necessary for the Chinese government to slow down the pace of investment and reorient the economy from foreign exports to domestic consumption, but that isn't going to cool down the economy in the next month or two. The problem with complaining about the Chinese governments lack of use of the "new controls" of macroeconomic controls is that they probably won't work without some "administrative control" underlying them.

The only thing that will work to cool the economy as quickly as is needed is what I call the "third lever" of administrative controls on bank lending and industrial reform. This did work in 2004, and the problem is that the Chinese government took their foot off the brake a little too early.

One thing that should be noted is that the nature of the "third lever" is changing. With each cycle, the Chinese government has been relying less on direct administrative orders to industry, and more on indirect methods such as administrative orders regarding the volume of bank credit. Whatever works.

I did make a comment on Brad Setser's blog

http://www.rgemonitor.com/blog/setser/132676

The bottom line in all of this is that the reforms that started in 1998 are basically working. There are now profitable SOE's sitting on top of reasonably healthy banks.

Also, the fact that news of corruption scandals are popping up right and left is probably a good thing. If you look at the dates of most of those scandals, they tend to be in the past. What I think has happened is that the government has cleaned up some of the worst of the scandals, and now that no one in power right now is in danger of losing their jobs over corruption, they have a free hand to bash the people that are out of power.
Also, it's not clear to me that from a social justice point of view the money from SOE's should go to SOE workers. SOE workers are a rather privileged bunch, and I can think of people who probably deserve the money more than workers in SOE's (namely the rural poor and workers in private non-state plants). My own sense is that the profits from SOE's should be invested back into improving China's health and education infrastructure. (Then again I'm an academic so there is some self-interest here.)

June 19, 2006

Arrrghhhh….

Filed under: quantitative finance, quantlib — twofish @ 10:48 pm

It looks like I have to finish converting the implementation of R-SWIG from using the S4 methods to do dispatching into using the dispatch functions in SWIG.  Right now, I either have to 1) rewrite a lot of my code to work around the broken overloading or 2) fix the broken way R-SWIG is overloading the code.

2) doesn't look too hard to do, but I hate having a period of time in which the code is broken.

June 18, 2006

The trouble with moral outrage…..

Filed under: china — twofish @ 2:43 pm

I’ve gotten in a lot of hot water over my opinions about China because I fail to show the right amount of moral outrage. Someone points out something bad and true about the Chinese government (like the fact that censors google, is massively corrupt, tortures prisoners, and doesn’t treat Tibetans and Uighurs all that well). I nod my head. Yup all true. And then the speakers gets really annoyed because I don’t advocate a *MASSIVE REVOLUTION* to *OVERTHROW THE GOVERNMENT*, and despite the bad things am generally supportive of the Communist Party. You must be *EVIL* or *STUPID*.

Calm down and let me explain the problem….

China has already gone through two revolutions, each of which left it in worse shape than before the revolution. If you want to convince me that revolution is good, you have to convince me that this revolution is different. The trouble with revolutions is that it is assumed that the basic problem is that the people rebelling are good, and powers that be are evil, and that heaven will break out when the good people come to power. Trouble is that the issue in most cases isn’t about good and evil, and when the good revolutionaries come to power, they behave in ways that are as bad or worse than the people they overthrew.

The other problem with moral outrage is that is doesn’t last that long. How long can you maintain anger? A day, a month, a year? To develop Mainland China’s political system to the point where it is comparable with the one’s in the United States or Taiwan will take decades of hard work, and then you *still* aren’t done. The United States has been a constitutional democracy for over two hundred years, and *still* each day is a struggle to make it work better. Once you realize that government is hard work, that there will *never* be a day when you can sit back and relax, then you realize that if you base your work on moral outrage, you’ll just burn yourself out.

Politics and strange bedfellows…

Filed under: china — twofish @ 2:29 pm

Politics changes things a lot. My political views are deep blue and very strongly Chinese reunificationist, but I personally think that Chen Shui-Bian shouldn’t resign and that all of this nonsense about recall is just a waste of time. This situation actually has left me with much more respect for Ma Ying-Jiou since it seems to me that he has resisted calls to be a part of this political theater as much as possible.

It’s also interesting that I seem to have become the most optimistic person in the room about Taiwan’s future. If you strip away some of the non-sense, Taiwan’s political system is actually a wonderful thing, and much of the reason that I would like greater contact and interaction between Taiwan and the Mainland is that I think Taiwan’s experience in creating a democratic system and trying hard to maintain it is going to have a good impact on Mainland politics. Geographically, Taiwan is very well situated to be the “gateway to Mainland China” and all that needs is a government that doesn’t act like an ostrich.

The main reason I’ve become such a strong supporter of Taiwan’s democratic system is that after two decades of screaming and close calls, we are *far* closer to Chinese reunification in 2007 than we were in 1987, and the ethnic timebomb that could have turned Taiwan into Northern Ireland has been defused.

Note I didn’t say close, I said closer. It’s still going to take another thirty to forty years to achieve political unification, but people are talking to each other, people are making money with each other, and there is a realistic path that will have it happen.

But from a personal point of view, it’s amazing the energy that I now have, now that I’m no longer worried that war is going to break out in the Taiwan Straits or that Taiwan is going to declare independence. People have worked out a set of understandings that are acceptable to Beijing, Washington, and most people on Taiwan that will get us through the next generation, and at that point what happens there, happens there.

June 17, 2006

To get rich is glorious….

Filed under: academia, massachusetts institute of technology — twofish @ 7:23 pm

A great deal of the reason I'm "pro-commercialization" is that my experience has been that the "anti-commercialization" rhetoric of academia justifies some very not-nice things when it comes to the sciences.  It creates a "priesthood mentality" in which status is determined by devotion to the cause, and in which grad students and post-docs are grossly underpaid in relation to the contributions that they provide.

I'm not asking to be fabulously wealthy (although it is nice to know that I could be if I did a few things different), but I don't think it is unreasonable for a physics Ph.D. know that they can have an upper middle class lifestyle doing something related to physics.

One thing that biases the discussion is that most of the people in the discussion about what to do are in the system, and a lot of the people outside the system have given up.

A restriction on use for non-profits isn't a big deal if you happen to work in a non-profit, but if you are on the outside, and have no hope of getting in, it looks a lot like a restrictive cartel (because it is).  

And the "we're non-profits so we are nice guys" doesn't wash.  Non-profits spend as much time fundraising as commercial institutions, and then can be just as exploitive of labor (graduate student, post-doc, and undergraduate) as commercial institutions.  The financial pressures are somewhat different, but MIT is driven as much about money as an institution like Capella University or the University of Phoenix, and giving MIT a greater right to courseware seems rather unjustified on the basis of principle.  (The fact that UoP is willing to give me money to let me teach there whereas MIT isn't, may color my judgement.)  Poverty is also not an excuse, MIT has huge cash reserves and has a hand in some very lucrative business, and its really hard to say that MIT with billions of dollars in its bank accounts is more deserving of a subsidy in the form of access to courseware than Twofish Enterprises Inc., a Texas for-profit S-corporation that has about US$100 in its bank account.

I should point out that I need to remind myself not to put too much energy into arguing these points.  Things would be *very* bad if it turned out that the NC-restrictions would forever prevent courseware which I can use from being developed.  They won't.  If MIT OCW doesn't have any commercially usable courseware, it will slow things down for about a two or three years, but eventually duplicate unencumbered courseware will be produced. 

Lead.  Follow.  Or get out of the way.  I have enough emotional attached to the place, that I'd really like MIT to lead on this.

The questions I'm more interested in are not what should happen (since everyone has an idea about this), but what will happen (which is an objective question that is empirically testable).  I do suspect that once one or two faculty somewhere in the world make wikimedia an integral part of their courses, that it will be the spark that lights up a huge conflagaration.  Right now I'm too busy to light that spark, but if no one else has done it in the next eighteen months, I'll reactivate my University of Phoenix adjunct teaching status, start teaching the Intro to Astronomy course, and put all of my course … notes.. (hits head on wall) 

Ohmygoodness…..  I just realized that I have a huge amount of course notes that I haven't put online yet.  Maybe I will light the spark next week.

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