Ten years ago I stepped out of international business and into the think-tank community with a primary goal of getting reality on the table. I had seen more corruption, more money laundering, more financial crime than any one person should see in a lifetime, and I resolved to say what I wanted to say about this overarching reality. Why wasn’t reality already on the table? What is it about this subject matter that is so mysterious or so frightening that we hesitate to go there? Basically is it that we can’t see it or don’t want to see it?

This is the reality that we seek to get on the table. Illicit outflows from developing and transitional economies vastly exceed overseas development assistance going into developing and transitional economies. In my estimates, which I and others think are conservative, by a factor of ten to one. More analysis, better analysis in the future may make this a narrower picture or make it a wider picture. But no analysis will make this a pretty picture.

What is true in the Netherlands and Europe is true all over the world: reducing the inequalities that exist between men and women is not only a matter of justice; it also makes economic sense.

According to the Dutch historians Tine de Moor and Jan Luyten van Zanden, the early break with patriarchy in Europe in the late Middle-Ages (1200-1500) accounts for the rise of capitalism and growing prosperity in the Western World. Girls were no longer married off, but selected their own spouses. As a result, it became worthwhile for parents to invest in girls’ education and wellbeing.

the raising of the minimum age of marriage, restrictions on polygamy, and the introduction of fair divorce laws.

mars/avril 2007 Effervescences religieuses dans le monde

Man asks of religion, "What is it for?"Religion asks of man, "What are you for?"

Abstract  Most versions of secularization theory expect advanced modernity to weaken religion. In contrast, this chapter argues that two different dimensions of contemporary society affect religion in opposite ways. Rising levels of human security and well-being are assurned to drive towards religious decline, while growing cultural diversity is assumed to push towards religious growth. These two hypotheses are simultaneously investigated, using world wide data for 50 000 respondents from 37 countries with a predominantly Christian heritage. As dependent variables, two dimensions of religious involvement which relate to two core aspects of secularization theory are analyzed: church-oriented religious involvement and preferences for a religious impact on politics. The findings from three different analytical strategies demonstrate that each of the two religious orientations is positively related to the cultural diversity, and also that each of them is negatively related to human security and well-being. Furthermore, the results also indicate that the religious changes which took place between 1981 and 1999/2000 are negatively related to human well-being and security, and positively to cultural diversity. Thus, a set of comprehensive analyses of one and the same set of world wide data indicate that human security and cultural diversity affect religious involvement in opposite ways. It seems too simplistic, therefore, to view modernization as a universal cause of religious decline.

“Strauss’s interpretation of Plato is wrong from beginning to end,” Burnyeat argued. “There is much talk in Straussian writings about the nature of ‘the philosopher’ but no sign of any knowledge, from the inside, of what it is to be actively involved in philosophy.”

Strauss said, political philosophy is good for something: “If for no other purpose, at least in order to defend a reasonable policy against overgenerous or utopian thought, we would need a genuine political philosophy reminding us of the limits set to all human hopes and wishes.”

“I was certainly struck by how very skeptical he was for the prospects of establishing democracy in Germany,” Tarcov says. In “Re-education,” Strauss doubted that a just government in Germany could be constructed after the war, at least not if the effort were left to the Allies. “A form of government which is merely imposed by a victorious enemy will not last,” Strauss predicted. “Only Germans, only Germans who remained in Germany and shared all the misery of Nazi rule and of defeat, can do it. Only they will be able to speak a language understandable to post-Hitlerian Germany.”

LOSING OUR DELUSIONS. Not Much Left by Martin Peretz  

"In crude terms, the Bank is basically providing additional cheap finance to the banks to meet any short term requirements they might face," he said. "An increase in the reserve requirement is in affect an increase in lending to banks at the base lending rate of 5.75%. "It represents a significant increase in the liquidity of the banking system ¿ and relieves pressure on the banks to borrow at the higher penalty rate of 6.75%."

Lord Justice Sedley told BBC News the current England and Wales database, which holds DNA from crime suspects and scenes, was "indefensible". He added it would be fairer to include "everybody, guilty or innocent" on it.

In Nature’s Casino

One-third of biggest UK businesses pay no taxBy Vanessa HoulderPublished: August 27 2007 22:02 | Last updated: August 27 2007 22:02Almost a third of the UK’s 700 biggest businesses paid no corporation tax in the 2005-06 financial year while another 30 per cent paid less than £10m each, an official study has found.

Fake Steve Here, Fake Steve There

Economists distinguish between “Risk” and “Uncertainty”: the former can be priced by financial markets while the latter cannot. The distinction between the two was made by the famous economist Frank H. Knight in his seminal book, Risk, Uncertainty, and Profit (1921). In brief, “Risk is present when future events occur with measurable probability” while “Uncertainty is present when the likelihood of future events is indefinite or incalculable”.    This distinction between risk and uncertainty helps to explain the recent market panic and turmoil. Today, the FT cites a market economist at Lehman who said: “We are in a minefield. No one knows where the mines are planted and we are just trying to stumble through it”. A few days ago another market participant put it this way: “It is not the corpses at the surface that are scary; it is the unknown corpses below the surface that may pop up unexpectedly”.   Unknown minefield; unexpected corpses: this is “uncertainty” rather than “risk”. Risk can be measured and priced because it depends on know distributions of events to which investors can assign probabilities. Uncertainty cannot be priced by markets because it relates to “fat tail” distributions and extreme events that cannot be easily predicted or measured.

A few days ago the CFO of Goldman Sachs justified the massive – 30% plus  - losses of the two Goldman Sachs hedge funds by arguing that these were unpredictable “25 standard deviation events” that should occur only once in a million years. The same thing was said by the LTCM “masters of the universe” when their highly leveraged hedge fund went belly up in 1998.

The proliferation of such products, as I have often noted before, carries many benefits for the financial system (most notably that they disperse risk across a much wider pool of investors). But this trend also carries at least one downside; it is adding to the opacity of the financial world. For although many corners of the structured credit universe are becoming more transparent, almost as soon as one chink of light emerges, another shadowy wave of activity emerges that is far more opaque.

The one element clear right through representative democracy’s advance across the world has been the centrality of popular rejection of autocratic effrontery, often exhilarating at the time but in retrospect a transitory pleasure. The structure of modern representative democracy (the form of state now called by that name) does not provide a clear model for any community to rule itself in freedom, let alone in reliable serenity and prosperity. What it provides is a practical basis through which to refuse to be ruled unaccountably and indefinitely against your will. Less steadily and on far less egalitarian terms, it also provides a framework through which to explore together what people should and should not attempt to do as a community. Virtually none of the elements of an answer to that question can come from democracy as an idea. Almost all have to be pieced together arduously from somewhere else.

Crudely speaking, the political appeal of democracy lies in its claim to realise political equality. (So, soberly speaking, does its potential political menace.)

All of the countries that do this are better off than they would be without international trade. But even though it is possible to prove mathematically that this is true for nations, it is not true for every group of people within nations.

The global imbalances created by this dynamic of American borrowing and foreign lending appear stable for now, but if they slip suddenly, that could pose serious dangers for middle- and working-class Americans through soaring interest rates, a crash in the housing market, and sharply higher prices for anything no longer made domestically.

was a run on the pound sterling and he blocked the International Monetary Fund (IMF) from stabilizing the currency. With sterling on the verge of collapse, says Frankel, “Eisenhower told them, ‘We are not going to bail out the pound unless you pull out of Suez.’” Facing bankruptcy, the British withdrew. This incident, notes Frankel, “marked the end of Great Britain’s ability to conduct an independent foreign policy.”

Consider the evidence uncovered by Paul Oyer, a Stanford Business School economist, in his recent paper, "The Making of an Investment Banker: Macroeconomic Shocks, Career Choice and Lifetime Income" (National Bureau of Economic Research Working Paper 12059, February 2006). Dr. Oyer tracked the careers of Stanford Business School graduates in the classes of 1960 to 1997.He found that the performance of the stock market in the two years the students were in business school played a major role in whether they took an investment banking job upon graduating and, because such jobs pay extremely well, upon the average salary of the class. That is no surprise. The startling thing about the data was his finding that the relative income differences among classes remained, even as much as 20 years later.