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Saturday, July 06, 2002

Generate your own superhero name

Via Ye Olde Blogge - gives me an apt name of "The Super Mercenary", given one of my "signatures" is "I've already got a guilty conscience. I may as well have the money too"...

(POST EDITED TO DELETE SOME IDENTIFYING DATA
Ye Olde Blogge wonders where the notion of "cowboys" as wild, lawless, etc comes from. The Times sort of dealt with this in their queries column this week.

The first move was in the 40s and 50s, when truck drivers got nicknamed "cowboys" for driving their trucks in a reckless manner, like cattle drives of legend (I don't know how accurate that impression is). This then moved to a description of workmen doing shoddy work in a possibly illegal manner. That usage was, apparently, first recorded in a letter in the Times in 1972 (I think that's the right year). That was all the question asked.

However, it's easy to see a quick move from the cowboy tradesman to anyone operating outside established laws. And hence to see an answer to Andrea's question.




(Of course, I stand to be corrected by someone who remembers actual usage before my birth. An alternative explanation might have been a reprise of the nomad-farmer conflict, with the gradual settlement of the West bringing distain from urban residents for cowboys.)
What's ironic about that book on choice, freedom, etc, is that it quotes from an article where Paul Krugman makes sense and talks proper economics. The article was targeted at a less nuanced anti-"MarketThink"er than our author, but it demonstrates something peculiar. If Mr Lee does, somewhere along the way, fall into the camp of the paternalists, then he falls within the penumbra of Krugman's argument. But if he doesn't, and his book develops an argument for governmental intervention to deal with negative externalities, then he'll find himself in a pretty crowded club. And Krugman seems a paid up member:

"[S]urely the most striking thing about the horrors of globalization illustrated in those photos is that for most of the world's people they represent aspirations, things they wish they had, rather than ominous threats. Traffic jams and ugly interchanges are annoying, but most people would gladly accept that annoyance in exchange for the freedom that comes with owning a car (and more to the point, being wealthy enough to afford one). Tract housing and apartment buildings may be ugly, but they are paradise compared with village huts or urban shanties. Wearing a suit and working at a computer in an office tower are, believe it or not, preferable to backbreaking work in a rice paddy. And nobody forces you to eat at McDonald's.

Now, of course what is good for the individual is not always good if everyone else does it too. Having a big house with a garden is nice, but seeing the countryside covered by suburban sprawl is not, and we might all be better off if we could all agree (or be convinced by tax incentives) to take up a bit less space. The same goes for cultural choices: Boston residents who indulge their taste for Canadian divas do undermine the prospects of local singer-songwriters and might be collectively better off if local radio stations had some kind of cultural content rule. But there is a very fine line between such arguments for collective action and supercilious paternalism, especially when cultural matters are concerned; are we warning societies about unintended consequences or are we simply disagreeing with individual tastes?

And it is very clear from the advertisement in the Times that the Turning Point Project--and the whole movement it represents--are on the supercilious side of that line. Although they talk of freedom and democracy, their key demand is that individuals be prevented from getting what they want--that governments be free, nay encouraged, to deny individuals the right to drive cars, work in offices, eat cheeseburgers, and watch satellite TV. Why? Presumably because people will really be happier if they retain their traditional "language, dress, and values." Thus, Spaniards would be happier if they still dressed in black and let narrow-minded priests run their lives, and residents of the American South would be happier if planters still sipped mint juleps, wore white suits, and accepted traditional deference from sharecroppers ... instead of living in this "dreary" modern world in which Madrid is just like Paris and Atlanta is just like New York.

Well, somehow I suspect that the residents of Madrid and Atlanta, while they may regret some loss of tradition, prefer modernity. And you know what? I think the rest of the world has the right to make the same choice."


By my reckoning, Mr Lee is either a paternalist, and subject to his own critiques, or he's going to find himself no further left than Gordon Brown.
Whatever you think about the Chinese Communist Party (and my views sit not entirely comfortably with an upcoming trip there), it's at least a good thing that China now has an Orwellian past, not an Orwellian present or future:

"Pan Lei said: “In primary school, we learned a slogan that said: ‘No Choice is Freedom.’ But it is a good feeling to have control over your life and money.” "




[For a piquant contrast, I hit google quickly looking for an environmentalist claiming that consumerism makes us less free, or some such. Sadly, the most obvious search terms were all eaten up by articles about how if everyone worked fewer hours, because they weren't slaves to consumerism, they'd have more free time. So I had to do three searches. I had to narrow things down. In the end, I searched for environment "more free" "restricting choice". There were only two results, one of them for an online book called "No-one makes you eat at McDonalds"..

I was surprised. I hadn't expected to find an apologia for freedom. Then I clicked through (don't be afraid of actually looking at the darn thing: it's only got the first three chapters up, and there are lots of pages you could skip if you wanted to, especially if you know rudiments of supply and demand). The subtitle is, perhaps inevitably, "The surprising deceptions of free choice". I suspect you can see where it goes from there.

"This book is a critique of two commonly held and closely related assumptions about choice and the free-enterprise system. The first is that in a free-market economy people are free to choose. The second is that the market is the best way of delivering on those choices: of giving people what they want."

Advantage: China.

Of course, the author decries responses to "MarketThink" that claim advertising (etc) destroys choice: "These responses end up claiming that "things we don't like are bad, while things we do like are good, and we should permit the good while restricting the bad". It is easy for those listening to the debates to translate these responses into "we know what is best for you", which unsurprisingly goes over like a lead balloon."

Basically, his arguments seem to rest on the existence of negative externalities, and a claim that they are pretty overpowering. His alternative doesn't become clear in the chapters available. Even if he's not of the opinion that individual's preferences are "bad", he does think that the outcome of everyone's choices can be the "wrong" one. And whilst that is the classical tragedy of the commons, he seems to be claiming that the because everyone's choices are affected by the choices made by their peers, that we might be better off without the ability to make those choices. As I say, you can't really tell where he's going with his argument. But in his example of urban sprawl, for instance, you wonder what's to happen to the people who would like, and would pay for, larger gardens in preference to rolling countryside. He may have something reasonable to say, but it looks a lot like his view is that "No choice means more freedom".

And for a practical response to that view, not much beats James Lileks' Fourth of July peaon to the supermarket:

" Forty flavors of orange juice, each blended with a different fruit - and if you’re the sort of person who rolls their eyes at that, and thinks that we shouldn’t be distracted by OJ permutations when we should be worrying about third-world debt, please take it outside. Life is good juice and a big lawn. If that’s what you want, you can have it. If you try."


Plus of course, its got these lines:

"According to the sci-fi movies of my youth, we would all be wearing one-piece unisex jumpsuits by now, eating our food in pellet form and watching telescreens embedded in the wall. The only part they got right was the pellet-formed food; how else would you describe Lucky Charms?"


Friday, July 05, 2002

Brendan O'Neill, a blogger who I've not really any contact with, takes several writers I'm more closely acquainted with to task for playing up a recent story about a tribal court in Pakistan sentencing a girl to be gang-raped because her brother walked with an upper caste girl without an escort. He says:

"Many webloggers are linking to this sordid story about a Pakistani girl who was allegedly gang-raped as punishment for her brother's flirtations with a girl from a higher social class.
...
But why are webloggers latching on to this isolated, gruesome incident? Most of them admit that there is pretty much nothing to say about it. Andrew Sullivan writes 'I don't know where to begin with this story', but manages to find one essential truth within it: 'that Stanley Fish is wrong. There can be universal reasonable standards that say some things are wrong, period. This is one of them.'
....
The truth is, this story has no 'meaning' and has nothing to tell us, which is precisely why so little can be said about it. It looks like being a strange, one-off occurrence, so shocking precisely because it is so rare. But the way in which elements of the right have latched on to the story is revealing. When gruesome incidents like this are paraded before us, with little comment or insight, they become little more than a form of pornography, a way for us to get off on how much more civilised we are than those in the third world.

It is even sadder when some in the West point to these kind of events to assert the difference between right and wrong, as Andrew Sullivan does. In our post-traditional, relativistic age, where there is little consensus about what is good or bad and what is right or wrong, many attempt to assert 'universal values' in negative terms - by saying we might not be 100-percent certain what is good, but we know that gang-raping a young girl for her brother's wrongs is definitely bad.

This is a lowest common denominator form of human morality, where the only way we can assert the superiority of Western values is by looking down our noses at the most base and atavistic events 'over there'.
...
The story of the Pakistani girl tells us nothing. Let's leave it alone.""


Frankly, this argument doesn't stand much critical pressure. O'Neill has two options: he can cleave to the notion of a universal morality, or he can get some pipe-packing philosophers down here, and get post-modern on our ass(es). If the latter (a tack he doesn't seem to take), then Sullivan seems right: this is a rebuttal, because it's quite plain that there are some things that just are wrong. And this is one of them. And if he doesn't accept that, or wants more argumentation, then I'll get my five best texts, and he can get his five best texts, and we'll have an old-fashioned drinking contest. Sorry, moral argument.

On the other hand, if he wants to claim there is some universal morality, then I'm puzzled. He presumably agrees that what happened here is wrong. I think his claim must be that there are plenty of bad things going on in the West, and the construction of a universal morality shouldn't be on the basis of identifying aspects of culture "over there" that we can feel superior to.

But that's a rather limp claim. If you want to build up a moral theory, starting with the basic building blocks seems a pretty good idea. And if you can't agree with people about even those basic elements, then your theory may not obtain universal assent, but any minor quibbles they have can probably also be consigned to the garbage can as you work your way through your identification of universal moral rules.

And if you can start from some basic principles on the easy cases (ones where self-analysis isn't involved), then you'll probably have a good deal of agreement when the time comes to tackle the hard cases, the ones far closer to home. Sure, Brendan may be arguing that really its only the hard cases that matter, but the value you can get from sorting out the easy issues might be immense. It's possible that the simplistique approach may mean you never turn your attention homewards, or that they can create a false sense of moral surety. But it's also possible that those easy cases might be emblematic of great problems, problems that need to be fixed more urgently than you need to identify the right shade of grey in a domestic ethical dispute. And that's particularly the case where a pattern exists of offences against any reasonable moral schema which also don't attract any serious sanction at present.

As you might guess, contrary to what O'Neill suggests, the story of the Pakistani girl tells us something. Or, more accurately, it's emblematic of something great and terrible. She may not have been killed (though she may wish she had). But "honour killings" (or blinding with acid, or kitchen oil, or other vicious crimes) are not isolated incidents. They are all too frequent in Pakistan, and this is only one of the more egregious examples.

To sample a random Amnesty report, an example of the good work they still do in so many places:

""The right to life of women in Pakistan is conditional on their obeying social norms and traditions." Hina Jilani, lawyer and human rights activist

Women in Pakistan live in fear. They face death by shooting, burning or killing with axes if they are deemed to have brought shame on the family. They are killed for supposed 'illicit' relationships, for marrying men of their choice, for divorcing abusive husbands. They are even murdered by their kin if they are raped as they are thereby deemed to have brought shame on their family. The truth of the suspicion does not matter -- merely the allegation is enough to bring dishonour on the family and therefore justifies the slaying.
...
Every year hundreds of women are known to die as a result of honour killings. Many more cases go unreported and almost all go unpunished. The isolation and fear of women living under such threats are compounded by state indifference to and complicity in women's oppression. Police almost invariably take the man's side in honour killings or domestic murders, and rarely prosecute the killers. Even when the men are convicted, the judiciary ensures that they usually receive a light sentence, reinforcing the view that men can kill their female relatives with virtual impunity. Specific laws hamper redress as they discriminate against women.
...
Some apologists claim that traditional practices as genuine manifestations of a community's culture may not be subjected to scrutiny from the perspective of rights contained in the Universal Declaration of Human Rights. Against this, the 1993 World Conference on Human Rights in the Vienna Declaration and Programme of Action stated: "All human rights are universal, indivisible and interdependent and interrelated"... The United Nations General Assembly in 1993 adopted the Declaration on the Elimination of Violence against Women which urges states not to "invoke custom, tradition or religious consideration to avoid their obligation" to eliminate discriminatory treatment of women
....
Ghazala was set on fire by her brother in Joharabad, Punjab province, on 6 January 1999. According to reports, she was murdered because her family suspected she was having an 'illicit' relationship with a neighbour...

Ghazala was burned to death in the name of honour. Hundreds of other women and girls suffer a similar fate every year amid general public support and little or no action by the authorities....The methods of honour killings vary. In Sindh, a kari (literally a 'black woman') and a karo ('a black man') are hacked to pieces by axe and hatchets, often with the complicity of the community. In Punjab, the killings, usually by shooting, are more often based on individual decisions and carried out in private. In most cases, husbands, fathers or brothers of the woman concerned commit the killings. In some cases, jirgas (tribal councils) decide that the woman should be killed and send men to carry out the deed.
...
286 women were reported to have been killed for reasons of honour in 1998 in the Punjab alone...[there were] 196 cases of karo-kari killings in Sindh in 1998, involving 255 deaths. The real number of such killings is vastly greater than those reported.

Pakistani women abroad do not escape the threat of honour killings. The Nottingham crown court in the United Kingdom in May 1999 sentenced a Pakistani woman and her grown-up son to life imprisonment for murdering the woman's daughter, Rukhsana Naz, a pregnant mother of two children. Rukhsana was perceived to have brought shame on the family by having a sexual relationship outside marriage. Her brother reportedly strangled Rukhsana, while her mother held her down. "


I'd say that an attempt at a universal ethics should take account of honour killings, and should be very clear that they are absolutely unacceptable. And I'd say that if you were looking for a way to make the world a better place through the moral improvement of the masses, the story of the Pakistani girl shows us one very good place to start.



[Update: per the original stories, it does seem that there will be some action taken in this case. However, it's pretty plain that none was expected:

"Senior police and provincial government officials visited Meerwala on Wednesday.

Asef Hayyat, Punjab's deputy inspector general of police, said the top officer at the local police station had been suspended and several close relatives of the suspects were detained to pressure the perpetrators into surrendering.
...
Pakistan has a tradition of tribal justice in which crimes or affronts to dignity are punished outside the framework of Pakistani law. The Human Rights Commission of Pakistan has demanded an end to punishments by tribal councils.

The June 22 rape has outraged rights groups, who say the number of atrocities against women in Pakistan is increasing. And Pakistan's Supreme Court on Wednesday directed top Punjab police and government officials to attend a special hearing Friday on the case."
]

Peter Briffa gets it just about right on one Guardian columnist's take on Big Brother:

"And Stuart Jeffries feels the same way, as he reveals in the Wanker. Or at least he used to:

"having watched the latest series develop, I came to hate one contestant virulently and hoped she got a quick and painful comeuppance. Jade, after all, was an intolerable loudmouth, a moron who thought that Sherlock Holmes was alive and related to Mother Teresa, and that East Anglia was near Tunisia. She got drunk and swore at her housemates, bad-mouthed them incessantly behind their backs (but in front of a huge TV audience), and kept her more charming points securely hidden".


Fair enough. So what changed, Stuart?

"That was until I read message boards on unofficial Big Brother websites in which threats to kill Jade from furious, hate-filled contributors would appear briefly. She was routinely, on account of her appearance, called Miss Piggy. I learned that a girl had been bullied at school because of her resemblance to Jade. Then I started taking the tabloids, a bad idea if you want to opt out from British hysteria. Typical was the Sunday People which yelled: "Ditch the Witch! Gobby Jade is public enemy No 1".

So, because other people agree with him, he's decided to change his mind. He's allowed to slag her off, he's allowed to be 'hysterical', but as for anyone else? Well we can't have that, now can we?

"Jade has been served up as Ms Detestable. Brash, graceless and ignorant, she's all the things that middle England hates and fears from inner-city working-class Britain".

But he's just attacked her for these very reasons! So, what is he, a poncy middle class twit who's scared of the proles? Or an inner-city prole who hates the middle-classes? Either way he's a wanker.

But he misses out the chance to mention the People's headline on Sunday: "Pig Brother". A classic of the ilk, that sold at least one extra copy. Sadly for taste, but marvellously for my chances of being driven insane, Jade has not been voted out this week either.

I'm interested to see this column appear in the Saudi state mouth-piece: ArabNews: Bin Laden no longer exists: Here is why.

They suggest that he's dead (and claim that "you read it here first", which seems unlikely, given all the other places* I've seen arguments to this effect before, let alone Mark Steyn's globally syndicated columns to the same effect). And they produce just about the same list of reasons why as quite few bloggers find convincing. They also provide a list of reasons of how Bin Ladenism came about (none of which "blame the victim" in the usual ways). Most interesting to see in what always seems a state-run paper is the fifth:

"The fifth element that made Bin Ladenism possible was the West’s, especially America’s, perceived weakness if not actual cowardice. A joke going round the militant Islamist circles until last year was that the only thing the Americans would do if attacked was to sue the attackers in court. That element no longer exists. The Americans, supported by the largest coalition in history, have shown that they are prepared to use force against their enemies even if that means a long war with no easy victory in sight."

It's an argument advanced by many, especially Instantman, about the perceptions of radical Islamists, and one that it's good to see the Arab world acknowledging as rebutted. Quite what the radicals think, it's hard to tell, but this column's a warning not to forget the dangers of an illusion of weakness.

Also of interest is the fourth claim: "The fourth element was the cynical attitude of many Western powers that sheltered the terrorists in the name of freedom of expression and dissent. We now know that London was the world capital of Al-Qaeda and that New York was its financial nerve center. The murder of the Afghan resistance leader Ahmad Shah Masood, for example, was planned in the British capital. Al-Qaeda militants operated in Germany, Holland, Belgium, France, Spain, Portugal and Italy, among other democracies, without any restraint."

Like many repressive regimes, the Saudis haven't fought shy of accusing the West of sheltering terrorists. As recent times have shown, in some cases that's true. But it's important to remember that in others it's not, and that dissidents shouldn't be shunned on the say-so of regimes you wouldn't invite to dinner. Sure, this claim casts blame on the West (and diverts attention from Bin Laden's backers, whose nationality is mentioned only non-specifically: where were the funds in New York raised?). But that doesn't make it less true.

The final interesting point (for me at least) is the critique at the beginning of the misinterpretation of Islam on which Bin Laden's cult was based. The interesting aspect, of course, is the omission of the relationship of these beliefs to Saudi Wahaddism. Arguably, that sort of relationship can't be discussed under the censors. However, this does drift close, and a (very) optimistic man might start to see shoots of intellectual recovery in Arabia in the article's celebration of the return to Islam's philosophic roots.



* no specific links, I'm afraid, but there's plenty to that effect in most places.
Wow. It wasn't really a shock to wake up to find the LA airport shooter was from the Middle East. A US resident, but of Egyptian origin. And it's still not certain he's a terrorist. But it's not like you can blame the Israelis for jumping to conclusions on this one.

And what a spectacularly stupid thing to do. Fatah had already tried threatening the US a couple of times in recent weeks. And now some bright spark attacks an Israeli target, in the US, on the Fourth of July.

I can scarcely think of a more effective way to destroy an lingering US governmental sympathy for the Palestinian cause. Because, let's be frank, that's the most likely reason that this happened.

Oh, and nice "who's the agent" take by the Guardian: El Al guards shoot US airport gunman. Yes, because that's the lede.

Thursday, July 04, 2002

Jane Galt, in a posting fury of classic American texts, managed to slip in a bit of sentimental tripe that's pretty ahistorical. It talks about the suffering of the signers of the Declaration of Independence at the hands of the insufferable Brits. I quote a US urban legend site (at excessive length):

"The implication of the article is that many of the Declaration's signers were killed, injured, or tortured; suffered serious illness due to mistreatment; or were stripped of their wealth and possessions for having dared to put their names on that famous document. The truth is that only one man, Richard Stockton, came to harm at the hands of the British as a direct result of his having signed the Declaration of Independence, and he isn't even mentioned here. The omission of anything having to do with Stockton is probably deliberate: After he was "dragged from his bed by night" by royalists and imprisoned in New York, he repudiated the Declaration of Independence and swore allegiance to Great Britain, thereby becoming the only one of the signers to violate the promise that appeared just above their signatures, the pledge to support the Declaration and each other with "our Lives, our Fortunes, and our sacred Honor." Stockton was eventually released by the British after he recanted, although the poor treatment he received during his captivity likely shortened his life.

The signers certainly believed that "the penalty would be death if they were captured," but that didn't prove to be the case. Several signers were captured by the British during the Revolutionary War, and all of them were released alive by the end of the war. Certainly they suffered the ill treatment often afforded to prisoners of war, but they were not tortured, nor is there any evidence that they were treated more harshly than other wartime prisoners who were not also signatories to the Declaration. Some signers were killed or injured because they took an active part in fighting the war for independence, some of them lost their wealth or their property because they used their assets to support the revolutionary cause, and some of them suffered losses simply because they (or their property) got in the way of a war that was being waged on American soil, but all of this was the result of the fortunes of war, not of their having signed a piece of paper. George Walton, a colonel in the revolutionary army, would have been taken prisoner at Battle of Savannah whether or not he signed the Declaration of Independence. The ships that Carter Braxton used to aid the revolutionary cause would have been sunk by the British whether or not he signed the Declaration of Independence. Property was often seized or destroyed as part of the spoils of war, and many men who did not sign the Declaration of Independence saw their homes ransacked. Yet most of the signers' homes were not looted at all, even though British troops had ample opportunity to do so.

None of this is to say that the signers of the Declaration of Independence were any less courageous because they suffered fates no worse than others who did not sign. They did take a huge risk in daring to put their names on a document that repudiated their government, and they had every reason to believe at the time that they might well be hanged for having done so. But "risk" and "sacrifice" are not the same thing, and it cheapens the latter to equate it with the former. Would any of us dare to suggest to those who have seen their children and spouses killed during military service that the fortunate servicemen who made it home safely "sacrificed" just as much as their sons and husbands?"


Penny attacks the Mirror's July 4th lead, an Pilger repeat of the massively debunked Mark Herod Afghan casualties study (see links to left). He misses the UK front cover, which mentions the US having killed "twice" as many Afghan civilians as died in the WTC. Headlined over a picture of Bush standing by a flag (at a funeral?) to the headline "A nation mourns" (approx impressions of the cover: I just swore, explained myself to the newsagent, and left with the Times).

Only commenting because he suggests that at the next Jubilee, the New York Post should run a comparable story on the Empire. My understanding was that New York schools already ran the Irish Republican take on aspects of it.
[Any opinions expressed are only my own, not those of any other party. Except, possibly, the study's authors, but probably not even them.]

Monday's FT pointed me to a very topical study on the relative merits of different countries accounting standards and enforcement.

What's interesting about it is that it places the US's accounts at the top of the pile for quality. That's perhaps an artifact of the precise measures chosen. But the broad thrust of the study, which demonstrates a relationship between the degree of manipulation of the accounts and the prevailing accounting and legal ethos of three "groups" of countries. The results suggest that "Anglo-Saxon capitalism" is, recent scandals notwithstanding, less likely to produce accounts that have been "tweaked" than other countries.

The authors' focus in looking at earnings management is that it's an extension of the agent problem. You pay a manager, your agent, to run your company. But, as "Jane", "Mindles" and "Robert" have been discussing of late, their interests won't be perfectly aligned with yours. Your interests basically lie in the company making the largest profits they can. Theirs lie in keeping their jobs, getting pay rises, and, potentially, ripping you off without getting caught. Managing earnings can get or keep benefits, or hide misappropriations.

The paper's pretty technical (and I am not qualified to assess the paper's technical aspects, particularly not the scary-looking maths). Basically, what it does is identify indicators that show that, for groups of companies, that profits may have been "managed". So, for example, the great the deviation between recorded profits and cash flows, the more likely that profits have been "managed". Cash is far harder to affect than profits, which are in part determined by estimated figures such as bad debt provisions, depreciation rates applied, provisions for legal charges, etc. There are three measures that pretty much measure this sort of deviation. The other is the ratio of small losses to small profits. Small losses can be turned into small losses through relatively small maneuvres, and so their relative frequency is a measure of how easy it is to manage earnings.

The countries that they sample are divided by two indicators. Firstly, whether they have "outsider" or "insider" business cultures. Secondly, the quality of enforcement of laws and regulations protecting investors.

The "business culture" distinction is one between countries like the US and the UK with a culture of "outside" investors having strong protection, and countries like Germany and Japan where, e.g., banks or powerful "insiders" have greater influence over the direction of a company, greater ability to act in their own interests and so forth. The "legal" measure's relevance is pretty clear, though if you want lots and lots and lots of details about it, they're in the paper.

Basically, countries fall into three clusters: those with "outsider" cultures and strong investor protection (US, UK, Norway, Hong Kong), those with "insider" cultures and strong investor protection (Austria, Taiwan, Germany, Japan), and those with "insider" cultures and weak investor protection (Italy, Spain, Thailand, Greece, Indonesia) (many other countries are included in the analysis). One interesting finding is that only one country in the first group (Norway) has a "codified" legal tradition: the others are all common law countries. Similarly, the majority of countries in the second group are "code" countries (Ireland and South Africa are the exceptions), whilst the third group of countries is a mixture, indicating possibly that the quality of enforcement is more significant than the legal tradition in determining the type of business culture that a country has.

The results clearly indicate that the first group's accounts suffer significantly less earnings management than the other other groups, and the second group less than the third. Countries with insider business cultures and weak enforcement of outsider legal protection thus have accounts which are more likely, to a greater or lesser degree, to be misleading to outside investors, and, eventually, to cost them real money.

This isn't exactly rocket science, but, at present, this is quite a relief from conventional wisdom about the prevailing rates of misleading accounts.

Of course, this says relatively little about the frequency of serious frauds. Furthermore, the paper itself points out one of the confounding variables: if there is strong protection of outside investors, management may be more likley to alter earnings. After all, the more rights outside investors have, the more likely punishment for failures or misdeeds will be. This is, of course, one of the common scenarios in the UK and the US: the management try to cover up previous errors to "keep the show on the road" in the hopes that things will right themselves. I've no idea how often they do, and this has been suggested as the background to some recent scandals.

However, the trend seems clear: there are better and worse countries to be an investor in, and the US isn't necessarily a bad one. Except, of course, for the current decline in share prices.




Sunday, June 30, 2002

I'm Marge. Who the hell are you?

What Simpsons Character Are You?



(most disturbingly, I suspected my answers were making me Lisa, but it was worse...)

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