Falkland Island Oil

This Guardian article (via L&P) talks about national claims to mineral rights beyond territorial waters — in particular the UK’s claims around the Falkland Islands and Rockall.

My immediate response was to the claim in the article:

the value of the oil under the sea in the region [of the Falkland Islands] is understood to be immense: seismic tests suggest there could be up to 60m barrels under the ocean floor.

60 million barrels. At $80/barrel, that is worth a bit under 5 billion dollars, or 2.5 billion pounds — less than a third of the cost of the 2012 Olympics, and probably much less than the cost of setting up extraction infrastructure. Either The Guardian has lost a lot of zeros, or the oil in the region is utterly insignificant.Luckily, I didn’t get where I am today by believing everything the Guardian told me. Looking at Wikipedia, it appears the Guardian is confusing millions and billions. http://en.wikipedia.org/wiki/Geology_of_the_Falkland_Islands#Petroleum_exploration_and_reserves It is considered probable that more than 60 billion petroleum barrels (10 km³) have been generated in the North Falkland Basin(I also learned that 60 million barrels is about two weeks’ current production from the North Sea.)

Things to consider:

  • There is believed to be significant oil near the Falklands.
  • The Guardian doesn’t know millions from billions.
  • Liberty and Power can’t see at a glance that 60 million barrels of oil is nothing, despite the fact that the price of a barrel of oil is hardly an obscure piece of knowledge these days.
  • I was going to go on about much-maligned Wikipedia being more reliable than the Guardian, but between drafting and posting this, the Guardian has (a) corrected the error and (b) left a note explaining the correction. Perhaps I should say that Wikipedia is more reliable than today’s Guardian, in that today’s Guardian has had little time to be fixed. However, if the fact in question is actually new (as opposed to background, like the 6 million barrels), which is at least suggested by insisting on today’s paper, then we all know Wikipedia is unreliable too. So scrub that one. Full marks to the Guardian for the promptness and manner of the correction.

In the long term, we cannot hold onto valuable mineral reserves in the South Atlantic. Defending them is justifiable, but probably not practical.

The time to negotiate is now. (Well, I’ve been saying this for 10+ years, so the best time has passed, but there is still an opportunity). We want:

  • A revenue-sharing agreement for mineral rights for 50 years.
  • Rights of the inhabitants guaranteed for 50 years.
  • A Northern Ireland style arrangement with oversight by the South American partner.
  • Sovereignty to devolve to the South American partner after the 50 years, Hong Kong style.

Argentina is the obvious partner for such a deal, but not the only possible one. Chile is, I believe, the closest mainland. Venezuela has the oil production infrastructure. And if none of them offer anything decent, hey, maybe the US would like a naval base or something. Let the bidding commence.

ICI: the investment fund

John Kay mourns the decline of ICI, now taken over by Akzo Nobel.

The products, the jobs, and the profits that old ICI used to make are all still going. What has gone — and what Kay is specifically mourning for, is the old ICI management organisation.

The heart of his argument is this:

The board of ICI accepted losses in pharmaceuticals for 20 years, in the conviction that drugs would eventually provide future sales and profits growth. Only after two decades was this belief vindicated through the commercialisation of Black’s discovery. Through his subsequent work for SmithKline, and the influence of his work on Glaxo, Black was the architect of Britain’s broader success in the industry.

Old ICI financed research out of its manufacturing profits. To my young mind, this seems an odd arrangement. Financing new business is the job of financiers, not manufacturers.

Kay picked one example of where the old arrangement worked well, but to me it sounds dreadfully fragile. If development of pharmaceuticals is the responsibility of the paint industry, then a bad couple of years in the paint market would mean no development. If managers of the paint industry feel themselves mainly responsible for development of other industries, they are likely to be less effective managing the paint.

Kay does not seem to be making the argument that investment in future industries is not happening – and indeed it is happening, in Britain, and elsewhere, but the investments are being made by specialist venture capitalists drawing on the broader capital markets, not by managers of other industries having a flutter with their firm’s profits.

There are several reasons why such investment funds (random example from Google) would be expected to do it better — they are specialists, they have wider access to capital. Today we see a great deal of investment into early-stage development of potential future chemistry-related industries.

The only reason why the old ICI model might be better would be if the successful managers in one industry, were, by virtue of their position and proven technical expertise, the best placed to make decisions about investment in future industries. If this were ever the case, it is by now much less so – it has been widely observed that the advance of science and technology has meant that specialisations become ever more narrow.

The story Kay tells of ICI sounds to me not so much a model to be emulated, but the rare exception to the story he has told many times, and more convincingly, of megalomaniac bosses trying to turn their companies into something else. See on Swissair, on HP, on BT — “policy making in business requires more than slogans and visions”. “Dreams are no basis for a sound corporate strategy”. That one dreamer got lucky at ICI in the 1960s does not shake the wisdom in those other columns.

Back to Debian

When I first used Linux, I picked the Debian distribution. I came to appreciate its combination of reliability and flexibility. However, the delays between stable releases were always an irritation, and after about ten years I moved several of my machines over to Gentoo. The big advantage of Gentoo for me was that, because it was a source distribution, the newest application packages didn’t depend on the newest system packages. I could emerge, say, gnome-meeting (as it was then), without having to have the 30 exact library versions that someone else had compiled it against.

I fairly soon found that Gentoo was too high-maintenance for machines that I wasn’t using myself. The older hardware I had left on Debian because compiling Gentoo on them would have taken weeks. Ubuntu was picking up by then, and the more modern hardware in the house, other than my own desktop, I moved from Gentoo to Ubuntu.

I had thought Ubuntu would be just what I wanted – the solid engineering of Debian but with frequent releases and the bells and whistles. I found it nice and smooth, but when something did go wrong, which wasn’t particularly often, it turned very difficult to deal with. In particular xfce (which the rest of my family use) never quite worked right – on one release you couldn’t log out without the session hanging!

In frustration, I took the advice of a colleague and went back to Debian, this time risking “testing”, which at that time was Etch. I don’t think I had a single problem. Etch went stable a while ago, and I had no reason to chase more recent application versions, so the family’s machines are all Debian Etch.

Recently my wife got a new laptop. I’m always slightly afraid of laptops, so her old one had been left with a badly out-of-date Gentoo. I downloaded the stable Etch installer CD (other machines had been installed to either sarge or a testing snapshot of etch). I was hugely impressed by the installer. It worked so well, and the whole process was very quick. I think the Etch installer is better than any I’ve used for any distribution. The only manual intervention was the partition setup, where I wanted to leave part of the disk alone and set up the rest with LVM, which was very straightforward.

The laptop’s wireless was tricky, but it was a broadcom 4311 for which native linux drivers are very new. I grabbed the latest testing kernel and patches from the wireless-dev guys, and it works very well. The driver’s been overhauled in the last couple of weeks, but I’m not in a hurry to pick up the new (b43) one.

A couple of days ago I tried to bring my Gentoo desktop up to date. I ended up in such a mess of obsolete packages, packages conflicting with non-existent versions of themselves, and general chaos, that the cleanness and lack of hassle of the various debian machines really sunk in.

Last time I replaced the hard disk I’d carefully left smallish free partitions and one huge LVM PV, so running the Etch install took about half an hour in the evening then the same again in the morning, and now I’m running a clean, coherent system where everything works together, and the package system knows exactly what’s on it and where it all came from.

I still have to stick on a few non-free bits: the flash player and Sun java, and maybe realplayer, but I respect debian’s ignoring those. I’ve got a system that’s completely managed and completely free software, and if I need a couple of extras on top, I can take care of that myself.

So this is just a huge round of applause for the Debian crew, who’ve made the distribution just what it should be. Some credit must og to Ubuntu too — although the distribution didn’t work out for me, I suspect a lot of the smoothness and ease of setup that Debian used to lack has been supplied via their contributions.

Sacrifices

I asked yesterday whether those who believed that concerted effort on an international scale was necessary to prevent climate catastrophe were really willing to countenance what I consider the only realistic approach to achieving that — a war of global conquest by the US.

It was a trick question. The fact is that almost nobody really believes in anthropogenic global warming (AGW) sufficiently to support policies they would otherwise have opposed. I am quite sure that if I miraculously convinced the “media liberals” that the neoconservative world empire was a prerequisite for significant CO2 reduction, they would decide to take their chances with the weather. The “sacrifices” they are advocating are all things they would advocate whatever the weather.

Among the vast majority of people who don’t believe in AGW enough to do anything about it are everybody making investments. Office towers two miles upstream of the Thames Barrier wouldn’t be worth a billion pounds each if investors thought the Isle of Dogs was going to be part of the sea. The policies which global warming alarmism is justifying are causing huge movements of capital; the threat of global warming itself — nothing.

That’s because there’s one thing that people are willing to do about AGW: vote for something pointless. Voting is the cheapest of responses. (Of course, if government actually does something, there may be trouble, but I’m wandering from the point).

Actually, perhaps that is the point. AGW is a good issue for politicians, not because voters agree with the policies, but because it makes the politician look like a good person. The ideal course of action for a politician is to use the issue to show how concerned they are about everyone, do enough about it to show they are genuine, but not actually achieve any policy change that causes anyone the slightest inconvenience, like raising fuel taxes or building wind turbines. As soon as anyone is asked to make real sacrifices (rather than the “sacrifice” of having the policies they’ve always wanted implemented), their estimate of the seriousness of AGW goes sharply down. Looked at that way, the lack of real meaningful action on AGW is not a bug, it’s a feature.

John Gray on progress

I spotted the latest book by John Gray in a bookshop, and was a little confused because I remembered him as a classical liberal from reading his book Liberalism when I was a student. I wondered whether there was another John Gray. Wikipedia sorted me out: there is only one John Gray (apart from this one, who isn’t relevant), but his views have changed over the years.

The links from the Wikipedia article are engrossing – this attack on Blair and neoconservatism is very persuasive, and led me to the 1999 speech I referred to in my previous piece. The discussion with Laurie Taylor about the religious and utopian aspects of modern humanism chimes very closely with the cryptocalvinism theory of Unqualified Reservations blog, which I have already praised.

But one of the major thrusts of his current arguments is one that would never have struck me as being necessary to make. In the Laurie Taylor piece, particularly, he is very keen to insist that there is not really any such thing as progress. We have progressed in technology, and science is dragged forwards as a result, but morality is not on a steadily improving track.

This is so obvious: anyone can tell the difference between a machine that works and one that doesn’t, so technology does not regress unless the economy producing it is destroyed. It is hard to deny the science underlying working technology, so science tends to progress along with the technology – it can on occasionally jump ahead, and even drop back level again, but it does not fall behind.

There is no equivalent incontrovertible test between good morality and bad morality, so morality can wander all over the shop, go round in circles, or go wild. In the long run, one could say that good morality works for its society and bad morality doesn’t, but so many other things affect the success of a society – movements of power and technology – that it doesn’t constitute an obvious experimental test.

History is one damned thing after another; there is no meaning to our lives unless we choose to pick one; humanity can probably solve most of the problems it encounters, but more will come along and there is no good reason to believe they can all be solved. It’s disorienting that people I consider sensible might doubt any of these things.

Black Mass is on my paperback list, anyway.

Internationalism

I commented on a post at Tim’s:

The gist is that the CiF poster he quotes does not believe that we can go on with national governments acting purely in their own countries’ interests:

“Gordon Brown needs to change the course of New Labour and replace the national agenda with a new cosmopolitan realism in order to tackle the challenges of terrorism, globalisation and climate change.”

The problem is that this is anything but a change of course for New Labour. As I quoted in my comment:

Today the impulse towards interdependence is immeasurably greater. We are witnessing the beginnings of a new doctrine of international community. By this I mean the explicit recognition that today more than ever before we are mutually dependent, that national interest is to a significant extent governed by international collaboration and that we need a clear and coherent debate as to the direction this doctrine takes us in each field of international endeavour. Just as within domestic politics, the notion of community – the belief that partnership and co-operation are essential to advance self-interest – is coming into its own; so it needs to find its own international echo. Global financial markets, the global environment, global security and disarmament issues: none of these can he solved without intense international co-operation.

That was Tony Blair in 1999, encouraging the US to stay the course – behind Bill Clinton – of subjugating the Balkans.

The election of the relatively anti-internationalist Bush in 2000 was a setback for New Labour’s “International Community”, but luckily for Blair, September 2001 brought him over into the internationalist camp.

If one truly wants a global authority to deal with global warming, or anything else, there are two things that need to be done:

  • Create a global authority.
  • Get it to agree with your policies.

It’s conceivable that a global authority, once existing, could change its policies, but not that a bunch of people that agree with some policy, but have no power, could become a global authority. So the appropriate strategy would be to encourage whatever practical internationalism exists, and then to change its policy. The only internationalist movements with realistic access to power in the world today are the US neoconservatives, and the EU. I have already explained why the EU does not, and will not, have sufficient power to challenge the US, so any internationalism today must start with neconservatism.

If I believed what Ulrich claims – that only a system of global cooperation can save us from catastrophe, my political strategy would be to throw in totally with the War on Terror. If the US gained the support of the EU to make Iraq into a colony, and then conquer Iran, world government would be that much closer. A powerful military base in the Middle East would put more pressure on the other major oil producers in the region. Venezuela, Canada and Nigeria are all relatively easy to handle. The next stage would be to bring Putin to heel. I admit I can’t see an easy way to do that, unless our Empire’s oil production can be hugely ramped up. A carefully placed nuclear “accident” might do the job, perhaps.

Once substantially all the world’s oil comes under the control of the Empire, it could rule the world. The politics of environmentalism would at that stage be very useful as a rationale for politically managing the oil supply, so it should not be too difficult to apply stage 2 of the climate change strategy, and convert the Emperor to the desired policy.

This whole political programme is, I must admit, very unpleasant. We are talking about at least two decades of continuous war of Imperial conquest. But, as Ulrich Beck says:

When taken seriously and thought through to its logical conclusions, climate change demands a political paradigm shift.

so, we must ask, are we prepared to make the necessary sacrifices, or aren’t we?

Hypothetical Questions

When one discusses future actions, one is making a hypothesis: If I get off the Northern Line at Moorgate, then I will be able to catch the 6.38 to Luton.

What would cause the hypothesized event to occur is skipped over. Normally this is fine, but the workings of the decision-making process are themselves in question, the hidden assumptions that are being made about them are of relevance. That is what caused my confusion over the Newcomb’s Paradox / Voting question — which could only be understood by making explicit the process by which the hypothetical decision was being made.

Political questions are similar — when one says “If the UK were to reject the new EU Treaty then …”, one is skipping over the question of how the rejection is to be reached. I tend to flippantly express opinions as to policy in the form “If I were Supreme Führer, …” which is a way of alerting listeners to the fact that realistic mechanisms are being ignored for the purposes of discussion.

As with Newcomb’s paradox, but scaled up to the polity, when the mechanism of political decision-making itself is part of the question, hypotheticals which brush aside the mechanics are pretty much meaningless. “If we had PR / yearly parliaments / a ‘Formalist State‘ — the specific changes that would make such changes possible would be as significant for the consequences as would the hypothesized changes themselves, so it is a bad idea to ignore them.

Mencius’ “magic ring” is the equivalent for political structure of my “if I were Führer” for particular policies: whatever realistic means are put forward to achieve a similar political structure, those means will have their own side-effects on the end result.

Views of Democracy

What do I think of democracy? I’ve been contradicting myself like mad recently, so I need to take stock.

The Mencius Moldbug theory, which I referred to this morning, is that democracy is something which the ruling caste wastefully pretend to be governed by. It has no substantive effect on policy, but carrying out the rituals helps to prevent the masses from rising against the permanent government.

I don’t buy that. I don’t really think that democracy is the “rule of the people”, but I do think its effects can be underestimated. What in many cases produces the underestimate is the observation that elections rarely change anything significant. However, that would be the case even if democracy were working perfectly. Politicians in the modern age know pretty well what will get them elected and what won’t, and therefore take the positions that will get them elected. The election, provided the politicians are acting sensibly, is a non-event. Looked at that way, it is a sign of the imperfection of the democratic system that elections have any effect at all.

So, we have some democracy. Good thing or bad thing?

I am going to be boringly conventional and say it is better than the alternatives I have come across. Mencius has not really explained his alternative: Abu Dhabi, Singapore and other port city-states are not necessarily replicable across real countries, and while I get that the enlightened self-interested despot would produce an open, free, high-economic-growth society that he could extract the maximum tax revenue from, I don’t see how he would prevent his subjects using their freedom to try to grab his loot. I don’t think today’s AR-15 vs armour comparison really covers the difficulty of holding onto power without a highly militarised police state. I stand by what I wrote here last year: The biggest cost (in the widest sense) of any political system is that which it expends in preventing its overthrow.

So if democracy is a necessary expense for a society free enough to have a really good economy, what about the story today that repressed societies are growing faster? Well, I agree with Tyler Cowen that they are not yet at the level of productivity that would be inconsistent with their lack of freedom. That is, I am claiming that repression limits productivity more than does freedom, not growth.

It still remains to decide whether – given that democracy is just part of the overhead cost of freedom – we should have lots of democracy, or just a minimum. This morning I was arguing for a minimum, but in the past I have asked for more than we actually have currently in the UK. Bryan Caplan claims that the US government follows better economic policy than it would if it actually obeyed public opinion.

I’m not sure. I suppose that despite the undemocratic features in the UK that I’ve complained about, the actual policies I object to are not ones that are opposed by the large mass of public opinion, and so more democracy would not actually help.

Why Five Years?

I happened to ask in a debate recently, why should we elect governments for five years? Most democracies seem to use four or five years between elections, but I’ve never seen a justification. One or two years would be quite practical, and ten or more years very easy.

I mentioned I’d been reading Unqualified Reservations lately. One argument made there is that all governments extract the maximum loot from the population, and the difference between governments is in the horizon they have (a government with a long horizon will try to maximize growth so as to be able to steal more in future), and in the dead-weight losses involved in holding on to power.

If one considers the value of elections to be that they prevent expensive civil wars and revolutions, by making it more tempting for rival factions to wait their turn, you can get some idea of how long an elected term should be. In order to maximise the time horizon of government, giving it an interest in shearing the sheep rather than slaughtering it, it should be as long as possible, but not so long that rivals give up waiting and try to overthrow it, necessitating wasteful countermeasures.

Given those concerns, I think we could beneficially stretch the term a bit longer than five years. Even ten might be possible, but that would be pushing it. More than ten, and I think the opposition would not be willing to wait.

It might not matter. Other features might be manipulated to advantage incumbents to a degree that compensates for overly short elected terms. I can imagine that there’s a sort of equilibrium – incumbents have enough power over the system that they only ever allow just enough chance of being deposed to prevent violent revolution.