Interesting that Christopher Hitchens and the Iraq War "leave" us on the same day. Hitchens wrote a lot about religion being the cause of all bloodshed in the world, but also described himself as a "single-issue voter", with the issue being "defending civilization against its terrorist enemies and their totalitarian protectors". He vowed to "expose and oppose any ambiguity" on that matter. He supported America's wars during the last decade, including the idea of preemptive strikes.

The newspapers are filled with stories of governments spending money they don't have. Some blame it on work ethic (Greece), historical trauma (Germany), political gridlock (US), or just sheer frivolity (Italy). The assumption is that political change will bring about a change in spending patterns. It won't. Politicians take on obligations they can't afford for one simple reason: Because they can.

Throughout history, cities have been at the centre of human development, rising and falling in line with the fortunes of different societies (Hall 1998). Urban life has been studied within a variety of disciplines - anthropology, sociology, politics, architecture, geography, and economics. Scholars have used urban analysis for diverse purposes, from predicting troughs in the business cycle by observing skyscrapers (Thornton, 2005) to writing "personal" biographies of individual cities - most recently Jerusalem (Sebag Montefiore, 2011). Within economic history, the study of cities focuses on the relation between urbanisation and development, and more specifically on the study of factors such as employment, wages, disposable income, access to capital and public goods, as well as more general economies or diseconomies of urban density and agglomeration of industry. 

The rapid growth of the Asian "Tiger" economies gave rise to the idea of an Asian development model, one which consists, perhaps, of a cultural component that is uniquely Asian. Confucianism, an existential and political philosophy that originated in China and spread through east and southeast Asia, is often mentioned as one such possible component. More broadly, the interplay between culture and development has fascinated economists and sociologists for generations and is addressed in many of the classics of both disciplines1. As two relatively closed societies and as Asia's only two large-scale economies to attain the status of developed countries, Japan and South Korea offer an interesting case study for the examination of the importance of Confucianism.

Japan and Korea are among a "handful of successes among the world's more than one hundred developing countries" (Kuznets 1994:1) and as such offer a successful development model to emerging economies in Asia and beyond. While both countries completed the transition to a fully-developed economy in the 20th century, it is worthwhile to examine the historical foundations of this transition. By surveying the 19th century roots of Korean and Japanese development, we can draw conclusions that may benefit the 21st century modernization efforts of other countries, most notably China. 

I have been living in London for two months now. Over the past week, two interesting things happened here. First, Muamar Qadaffi, an autocratic ruler, and a man whose messengers were convicted in court for killing British civilians, was welcome (via satellite) as a guest speaker at the London School of Economics, where the moderator referred to him as "the brother leader". The university, to be clear, is partly funded by the British tax payer. 

"The central concept of liberalism is that under the enforcement of universal rules of just conduct, protecting a recognizable private domain of individuals, a spontaneous order of human activities of much greater complexity will form itself than could ever be produced by deliberate arrangement, and that in consequence the coercive activities of government should be limited to the enforcement of such rules, whatever other services government may at the same time render by administering those particular resources which have been placed at its disposal for those purposes"

Friedrich A. Hayek, Studies in Philosophy, Politics, and Economics, 1969. Apart from being one of the longest sentences ever, the above encapsulates Hayek's key ideas about society, politics, and economic planning. I will follow up with a proper explanation when I have a free moment (Sorry for all the quotes this week!).

"The impulse of acquisition, pursuit of gain, of money, of the greatest possible amount of money, has in itself nothing to do with capitalism. This impulse exists and has existed among waiters, physicians, coachmen, artists, prostitutes, and beggars. One may say that it has been common to all sorts and conditions of men at all times and in all countries of the earth, wherever the objective possibility of it is or has been given... Unlimited greed for gain is not the least identical with capitalism, and is still less its spirit. Capitalism may even be identical with restraint, or at least a rational tempering, of this irrational impulse."

"The importance which the certainty of law has for the smooth and efficient running of a free society can hardly be exaggerated. There is probably no single factor which has contributed more to the prosperity of the West than the relative certainty of law which has prevailed here."

Tomorrow evening, Israel will celebrate its 62nd birthday. In honor of the occasion, we set to explore five Israeli figures of speech that encapsulate the country's character -- a unique mix of good humor, grief, paranoia, and almost nonsensical optimism. 

A specter is haunting Europe -- the specter of bankruptcy. Just when we thought that things in the old continent are as bad as it gets, it looks like they are about to get much worse. A few weeks ago, Greece practically defaulted on its debt; Several other European countries, including England, seemed to be heading in the same direction; and global investors were already losing faith in Europe's ability to recover. And now, a highly improbable event is threatening to exacerbate the situation.

The American media is in combative mood: A year and a half after Lehman's collapse, the pundits are finally waking up to the fact that China bears a significant share of the blame for the current financial crisis. And so, the Krugmans of this world are calling for the US government to 'punish' China through a variety of protectionist measures. 

'There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.'

The above quote from Ludwig von Mises's Human Action (1949) pretty much sums up where we are and where we're headed. There are two ways out of this mess: Allowing bad banks and bad companies to go bankrupt and take some pain in the short term; or bail them out through government "creation" of more money and cheap credit.  Looks like the world has opted for the second option. 

The latest financial crisis sparked public interest in economics and rekindled the debate concerning the proper role the dismal science should play in our lives: books by and about dead economists such as Keynes, Hayek, and Schumpeter are in high demand; economic blogs are more popular than ever; and the public is bombarded with introspective monologues by contemporary economists, all the way from Paul Krugman to John Chochrane. The latest contribution is a Wall Street Journal article by Prof. Russ Roberts. Unlike the opposing so-called scientific explanations for the crisis suggested by various economists, Roberts is questioning whether economic science is at all a science and suggests that more than anything, economics might be suffering from a crisis of identity. 

'Google News is a computer-generated news site that aggregates headlines from news sources worldwide, groups similar stories together and displays them according to each reader's personalized interests...

Our articles are selected and ranked by computers that evaluate, among other things, how often and on what sites a story appears online....

As a result, stories are sorted without regard to political viewpoint or ideology and you can choose from a wide variety of perspectives on any given story.'

'The Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.'

One of the most popular memes repeated by mainstream media since the collapse of Lehman Brothers last year is the idea that China will manage to avoid the consequences of the economic downturn by shifting from an export-based economy to one based on local consumption. 

In a recent discussion with an American friend, I pointed out the colossal damage caused to America by the accumulation of additional debt and the bailouts of failed financial institutions. 

"People are always shouting they want to create a better future. It's not true. The future is an apathetic void of no interest to anyone. The past is full of life, eager to irritate us, provoke and insult us, tempt us to destroy or repaint it. The only reason people want to be masters of the future is to change the past"