UPDATE ARABIAN BUSINESS

February 17, 2008 at 11:29 pm | Posted in Arabs, Economics, Financial, Globalization, Middle East, Research | Leave a comment

spin-globe.gif

books-globe.gif

globe-purple.gif

history.gif

world.gif

compass.gif

loudspeaker.gif

ab.gif

abmag.jpg

Arabian Business Weekly Update

Arabian Business Weekly Update

17th February 2008:

Rick runs out of road

Arabian Business Weekly Update (newsletters@mail.itp.net)

Sun 2/17/08

Arabian Business Weekly Update (newsletters@itp.com)

Intelligent analysis of the stories behind the business headlines

An ITP Business Publication

Sunday, 17 February 2008

Feedback

Comment on any articles or features appearing in this newsletter or in Arabian Business Magazine

Advertise

Richard O’Sullivan

on +971 4 2108 548 or +971 50 6514 745

Editorial Leader

Rick runs out of road

Spare a thought for General Motors head Rick Wagoner, whose automotive empire is currently hurtling towards a brick wall.

Business News

Emaar shares continue to disappoint

Wednesday, 13 February 2008

Dubai property firm’s 20% dividend likely to sour shareholders, analysts say.

Qatar calls for urgent action on population

Wednesday, 13 February 2008

Effects of rapid growth on education, health and social systems must be addressed, committee warns.

Egypt to plough $16.3bn into transportation

Tuesday, 12 February 2008

Investment over next five years to meet demand from rapid economic growth.

Gulf banks conceal subprime losses

Tuesday, 12 February 2008

Ratings agency Standard and Poor’s warns lenders may be hiding shortfalls related to mortgage crisis.

Qatar plans $250mn Syria development

Tuesday, 12 February 2008

State-owned Qatari Diar Real Estate to build Ibn Hani Bay resort near Lattakia on Mediterranean coast.

UAE ‘too dependent’ on physical labour

Tuesday, 12 February 2008

Construction industry employs too many people, not enough technology, says Nakheel CEO.

Guest Column

Legal costs of a home loan

Sunday, 17 February 2008

The development of Dubai’s home mortgage security arrangements is one of the industry’s most interesting stories.

Features

Counterfeit culture

Sunday, 17 February 2008

Millions of dollars worth of illicit goods make their way around the world via a complex trading route.

Laid-back living

Sunday, 17 February 2008

Despite its skyscrapers and bustling streets, Brisbane is refreshingly humble and a haven of calm.

The brokerage business

Sunday, 17 February 2008

Brokerage houses have never been bigger business, but how long is the boom set to last?

ITP, the leading business, consumer, communication and IT publishers in the Middle East. Arabian Business or the Arabian Business Weekly Update

Our web sites:

(ITP.net; ArabianBusiness.com; ArabianBusiness.com/Jobs; TimeOutDubai.com; TimeOutAbuDhabi.com; Ahlan.ae and Ahlan! Live).

Arabian Business Weekly Update

Arabian Business Weekly Update 17th

February 2008: Rick runs out of road

Arabian Business Weekly Update (newsletters@mail.itp.net)

Arabian Business Weekly Update (newsletters@itp.com)

Sun 2/17/08

ZALMAN SHOVAL ON ANNAPOLIS

February 17, 2008 at 3:52 pm | Posted in Arabs, Israel, Judaica, Middle East, Palestine, USA, Zionism | Leave a comment

spin-globe.gif

books-globe.gif

globe-purple.gif

history.gif

world.gif

compass.gif

loudspeaker.gif

Jerusalem Center for Public Affairs

Jerusalem Viewpoints

jcpa@netvision.net.il

Feb 17, 2008

Annapolis — Road to Nowhere

Zalman Shoval – VP #561

briefmail@list-jcpa.org

Annapolis — Road to Nowhere – Zalman Shoval – VP
#561 Inbox

Jerusalem Viewpoints briefmail@list-jcpa.org

The Jerusalem Viewpoints series is

published by the Institute for

Contemporary Affairs, founded

jointly with the Wechsler Family

Foundation at the Jerusalem

Center for Public Affairs.

Jerusalem Viewpoints

No. 561 25 Shvat 5768 / 1 February 2008

Annapolis – Road to Nowhere

Zalman Shoval

Zalman Shoval, a member of the Board of Overseers of the Jerusalem Center for Public Affairs, served as Israel’s Ambassador to the United States from 1990 to 1993 and from 1998 to 2000.

In the past, including under Prime Minister Ariel Sharon, one often heard of concessions or compromises on the territories Israel captured in the 1967 Six-Day War referred to as painful. According to Sharon, Israel was to give up something that was ours, not return something to which we have no right.

The Israeli government has in effect relented on the Roadmap demand that the Palestinians first stop all the violence and destroy the terrorist infrastructure. Yet if one should raise in this context the question of Israeli settlements, it will be difficult to convince most Israelis that building a house or a kindergarten should be equated with suicide bombings and the killing of women and children.

In an unimplementable “shelf agreement,” Israel will be seen to have committed itself to certain far-reaching steps that it has not implemented. On the one hand, this will be seen as the starting point for any future negotiations, and on the other hand, it will invite increasing pressure on Israel, with the added element of ongoing terror.

When Israel originally accepted the Roadmap, it was stipulated that there would be no negotiations on the permanent status of the West Bank and Gaza (Phases 2 and 3) until the Palestinians first fulfill their security commitments in accordance with Phase 1. If those pre-conditions for negotiations from 2003 have already melted away four years later, then why shouldn’t Annapolis pre-conditions for implementation of the “shelf agreement” melt away four years from now?

Wasn’t Annapolis touted primarily as a way to create an effective front against Iran? The U.S. National Intelligence Estimate published a few days after Annapolis made nonsense of that intention. In fact, one actually sees a rapprochement between Iran and those “moderate” Arab regimes, including Egypt and Saudi Arabia.

A Defining Moment?

There is a big question whether the Annapolis Conference held on November 27, 2007, should be seen as a “defining event” or even a “defining moment” in the political process between Israel and the Arab world and the Palestinians. It may have looked like a defining moment in the eyes of American policy-makers, but perhaps more in connection to other reasons – like Iraq, or domestic politics, or legacies – than to Arab-Israeli peace.

A few years ago there was a fierce debate, mainly in the U.S., about whether the road to Jerusalem led through Baghdad – or the other way around. In retrospect, both views were wrong – though perhaps had the U.S. been more successful in Iraq, the first assumption, the road to Jerusalem leading through Baghdad, might have been correct. Today, President George W. Bush still speaks about his determination to build on the Annapolis meeting as one of the pillars of his foreign policy. He spoke about a “peace agreement that defines a Palestinian state” being achieved in his January 28, 2008, State of the Union address.

President Bush’s visit to Israel earlier in January was welcomed by most Israelis, but with regard to Annapolis, there has been a considerable degree of skepticism about the administration’s approach from across the Israeli political spectrum. Anyway, President Bush has said he was not going to impose a timetable on the parties, perhaps with a reawakened sense of realism, and awareness of the unpopularity of both the Israeli and Palestinian leaders, and also of the distinct possibility that by the end of the year Israel could be in the midst of elections.

Why Are Concessions “Painful”?

It is not necessary to dwell here on possible changes in attitude on the part of the Bush administration, but no less importantly, there has been a dramatic change, not always noticed, in official Israeli attitudes under the current government. In the past, including under Prime Minister Ariel Sharon, one often heard of concessions or compromises on the territories Israel captured in the 1967 Six-Day War referred to as painful, although as perhaps necessary political decisions. In other words, according to Sharon, Israel was to give up something that was ours, not return something to which we have no right. In contrast, the attitude of the current government has forgone with Israel’s basic moral, historic, or legal claims to the territories.

Palestinian President Mahmoud Abbas (Abu Mazen), at and before Annapolis, had raised all of the most extreme and unbending Palestinian demands, and the question is if this was intended merely for domestic Palestinian consumption, or whether, perhaps egged on by the Saudis, the Arab League and others, he believed that in view of the political weakness of the Israeli government and the overall aims of the U.S. in the region, there was actually a chance that Israel would be forced to accede to many of the Palestinian demands, and if not, be blamed for holding up the process.

If one looks back all the way to Oslo, one cannot escape the conclusion that Israeli compliance led not to more Palestinian compliance, but rather the other way around. This includes the “Roadmap,” in connection with which the Israeli government has in effect relented on the demand that the Palestinians stop all the violence and destroy the terrorist infrastructure. Yet if, as we are used to, one should raise in this context the question of Israeli settlements, it will be difficult to convince most Israelis that building a house or a kindergarten should be equated with suicide bombings and the killing of women and children.

There are more than a few views about Annapolis and its consequences, but, in general, one can point to at least the following reactions: those who don’t think that the necessary ingredients for peace, including suitable leaderships, are there yet; those on the Israeli side who oppose it for either ideological or pragmatic, especially security-linked, reasons; on the Palestinian side there are those, also for both ideological or pragmatic reasons, who have either not given up their dream of eliminating the Jewish state altogether; or those who doubt whether the proposed Palestinian mini-state has much of a chance to be “viable” or to survive in the long run.

The Importance of Process

Opposed to the above are the supporters of Annapolis, on both sides, including the not too many who genuinely believe that Annapolis has generated a process which could actually lead to peace at some time in the future, and others who are much less confident but for reasons often linked to domestic politics, especially in Israel but also in the Palestinian Authority and perhaps also with an eye towards Washington, will declare their undying support for it. On the Israeli side, if you fine-tune what Mr. Olmert says, this means in effect: what I really need is the process, the talks, not necessarily the outcome, so that I can present myself to the public as the leader who has to be kept in power in order to give peace a chance. And then there are those, maybe the majority, who say, “the talks don’t really matter one way or another, nothing will come out of them anyway.”

In the meantime, talks have started on the core issues – Jerusalem, refugees, borders, settlements – headed on the Israeli side by Foreign Minister Tzipi Livni and on the Palestinian side by Abu Ala. But even if there could hypothetically be agreement on all these points – which means, for instance, Abu Mazen declaring that the “right of return,” including UN General Assembly Resolution 194, is dead and buried, or recognizing Israel as the state of the Jewish people; or Olmert agreeing to withdraw completely to the “Green Line” and to divide Jerusalem, etc. – implementation is not imaginable under present circumstances.

Still, paradoxically, one cannot rule out altogether that, in spite of all this, by the end of this year the two sides – urged on or “steam-rolled” (as reportedly Secretary of State Condoleezza Rice so elegantly put it) by the U.S. – could indeed agree on a document which will include all sorts of references to some, though not all, of the so-called core issues, although almost nothing will or can be implemented. Actually, if you listen to Defense Minister Ehud Barak or even Prime Minister Olmert, that’s what they say.

Even less likely is there any possibility of implementation on the Palestinian side, for instance on the question of refugees. It is also a near certainty, in view of Hamas’ control of Gaza, that without the continued presence of the IDF and Israel’s other security organs in the West Bank, Hamas would take over there too.

A “Shelf Agreement” Will Be the Starting Point for Future Negotiations

The inevitable outcome of this scenario of an unimplementable paper agreement, however, will in all likelihood be that in the eyes not only of the Palestinians and the Arab world, but also in the rest of the world including the U.S., Israel will be seen to have committed itself to certain far-reaching steps that it has not implemented. On the one hand, this will be seen as the starting point for any future negotiations, and on the other hand, it will invite increasing pressure on Israel, with the added element of ongoing terror.

In other words, the scenario that the advocates of the Annapolis process have in mind is the completion of a “shelf agreement” – an Israeli-Palestinian accord that sits on a shelf and is pulled down at a later date when political conditions on the ground permit it to be implemented. The idea behind the “shelf agreement” is that the Fatah movement, armed with this new treaty, will supposedly be placed in a better position to draw Palestinians to its side of the political fence, and hence assist, theoretically, to strengthen Palestinian moderation.

In the meantime, Israel is supposed to be reassured that the “shelf agreement” will not be implemented until all of its security concerns are addressed through strict implementation of the first phases of the 2003 Roadmap for Peace.

In reality, this entire scenario is highly questionable in terms of its implementation, and is dangerous for Israel. For example, Israel should be extremely concerned that once it signs a “shelf agreement,” international pressures will grow for it to be implemented even before the Palestinians fulfill their Roadmap commitments in the area of security.

After all, when Israel originally accepted the 2003 Roadmap for Peace, it was stipulated that there would be no negotiations on the permanent status of the West Bank and Gaza Strip, that appear in Phases 2 and 3, until the Palestinians first fulfill their security commitments in accordance with Phase 1 of the Roadmap. If those pre-conditions for negotiations from 2003 have already melted away four years later, then why shouldn’t Annapolis pre-conditions for implementation of the “shelf agreement” melt away four years from now?

Moreover, the “shelf agreement” will already affect the situation on the ground even before it is implemented. In the areas assigned to come under Palestinian sovereignty in the future, a struggle for influence will accelerate in anticipation of the coming vacuum, leading to more widespread clashes between Hamas and its competitors, as well as a diminution of any residual Israeli security-related authority. If Mahmoud Abbas and Salam Fayyad are today in power in Ramallah because Israeli forces are in a position to intervene in the event that Hamas tries an armed West Bank takeover, then what will happen to them if Israeli authority begins to erode even before the “shelf agreement” is officially implemented?

In any case, Israel already saw in the 1990s during the Oslo process that progress in the peace process did not automatically undercut the influence of Hamas and build up the strength of a moderate Fatah. Hamas in fact gained strength because Fatah looked increasingly corrupt to many Palestinians. Today, Fatah is still viewed the same way and, in addition, it has become a highly fragmented organization, with multiple centers of power. In short, Fatah is not in a strong position to displace Hamas, Annapolis notwithstanding. And segments of Fatah are still involved in terrorism against Israel, in any case. Nor, it should be remembered, are Abbas’ views all that different from those of Yasser Arafat.

The De-Facto Peace Option

In other words, the emergence of an Israeli-Palestinian “shelf agreement” does not mean peace. Conversely, de-facto peace can be achieved under certain circumstances, even on a long-term basis, without a final, comprehensive written agreement, and there have been examples of both all through history. A real, permanent peace agreement must have the support of a substantial majority on both sides – and this is not the case today. What the late Moshe Dayan said almost thirty years ago still holds true: it will be difficult to have a written document that both Israelis and Palestinians can live with.

What’s more, such a virtual peace may abort or at least delay possible concrete progress, including in the economic sphere, which could eventually create an environment of real, as opposed to virtual, peace – and make it clearer to Israelis and Palestinians what and how Palestinian self-governance could actually look like.

The Paris donors’ conference could have been a positive development in this connection, but it remains to be seen if it will promote real economic ventures, primarily through the private sector, or if, once again, it will just be subsidizing the Palestinian Authority with all that this incurs – waste, inefficiency, corruption – everything but an improvement in the economic situation of the Palestinian population. The very term “donor’s” conference was wrong – it should have been called a business or economic conference.

If one wants to be practical, several supposedly axiomatic premises should also be looked at anew. One is that “everyone knows what the solution will look like” – really? Or that “unless a two-state solution is quickly arrived at, Israel will cease to exist as a Jewish state.” There will have to be disconnection of some sort (the exact term is unimportant), but there could be more than one way to arrive at it. Statehood is one option, in the eyes of many perhaps the only option, but options – unless they are backdated – by definition are something to be exercised in the future, and only if the price is right.

What Happened to the Annapolis Anti-Iran Coalition?

We have short memories, but wasn’t Annapolis touted, including in Israel, primarily as a way to create an effective front against Iran? The U.S. National Intelligence Estimate published a few days after Annapolis made nonsense of that intention. In fact, in the last few weeks one actually sees a rapprochement between Iran and those “moderate” Arab regimes, including Egypt and Saudi Arabia.

It should be clear that Iran is still the paramount concern, but using it as a pretext in the Israeli-Palestinian equation is not helpful, either in confronting Iran’s ambitions or in trying to promote peace between Israel and the Arab world. Realistically, if Israel is pressured to implement a “shelf agreement” that strips it of defensible borders and compromises its position in Jerusalem, then the strategic outcome of such a situation will actually serve the interests of Hamas and Iran who will be better positioned to exploit Israel’s new vulnerabilities. Indeed, Israel’s 2005 disengagement from Gaza was also touted as an initiative that would strengthen moderation, but it led to a Hamas takeover and to the entry of Iranian-trained Palestinian terrorists into the Gaza area. In fact, Hamas is now adopting many aspects of the military organization of Iranian-backed Hizbullah.

In any event, Bush’s meeting with the Saudi leadership doesn’t look to have been too successful – not with regard to oil prices and not with regard to the Israeli-Palestinian issue. This supposed “coalition of moderates” has not brought about a more moderate stance with regard to the Israeli-Palestinian issue. In fact, it may mean the opposite, namely, an effort to show Arab, including Palestinian, public opinion that not only are those “moderates” as tough on Israel as the best of them, including Iran, but contrary to them, more effective, perhaps with the help of the U.S., in forcing Israel to make concessions.

As Bloomberg’s Janine Zacharia, accompanying President Bush on his visit to Riyadh, reported, Saudi Foreign Minister Saud al-Faisal has said that his country wouldn’t normalize ties with Israel, while another senior Saudi official, Prince Turki al-Faisal, offered Israel “cooperation,” but only if it withdrew “from all occupied Arab territories.” He also superciliously said that Arabs “would start thinking of Israelis as Arab Jews(!) and agree to the “integration of Israel into the Arab geographical entity.”

* * *

Zalman Shoval, a member of the Board of Overseers of the Jerusalem Center for Public Affairs, served as Israel’s Ambassador to the United States from 1990 to 1993 and from 1998 to 2000. A veteran member of Israel’s Knesset (1970-1981, 1988-1990), Ambassador Shoval was a senior aide to the late Moshe Dayan during his tenure as foreign minister in the Begin government, including during the first Camp David conference. He is currently head of the Foreign Relations Department of the Likud party.

——————————————————————————–

The Jerusalem Letter and Jerusalem Viewpoints are published by the Jerusalem Center for Public Affairs, 13 Tel-Hai St., Jerusalem, Israel; Tel. 972-2-5619281, Fax. 972-2-5619112, Internet: jcpa@netvision.net.il.

In U.S.A.: Center for Jewish Community Studies, 5800 Park Heights Avenue, Baltimore, MD 21215 USA, Tel. (410) 664-5222; Fax. (410) 664-1228. ISSN: 0792-7304.

The opinions expressed by the authors of Jerusalem Viewpoints do not necessarily reflect those of the Jerusalem Center for Public Affairs.

Jerusalem Viewpoints jcpa@netvision.net.il

——————————————————————————–

Jerusalem Letter/Viewpoints

http://www.list-jcpa.org/jllist-sub.html

Jerusalem Viewpoints briefmail@list-jcpa.org

Feb 17, 2008

Annapolis — Road to Nowhere – Zalman Shoval –VP #561

briefmail@list-jcpa.org

Annapolis — Road to Nowhere – Zalman Shoval – VP #561 Inbox

Jerusalem Viewpoints briefmail@list-jcpa.org

Feb 17, 2008

THOMAS CARLYLE’S PHRASE THE DISMAL SCIENCE

February 17, 2008 at 12:47 pm | Posted in Africa, Economics, Financial, Globalization, History, Literary, Philosophy, United Kingdom | Leave a comment

spin-globe.gif

books-globe.gif

globe-purple.gif

history.gif

world.gif

compass.gif

loudspeaker.gif

The phrase Dismal Science from

Thomas Carlyle

“Occasional Discourse on the Negro

Question”

[Thomas Carlyle] 1849

Fraser’s Magazine for Town and

Country

(London, Vol. XL., February 1849)

The full phrase “dismal science” first occurs in Carlyle’s 1849 tract entitled Occasional Discourse on the Negro Question, in which he was arguing for the reintroduction of slavery as a means to regulate the labor market in the West Indies:

“Not a ‘gay science,’ I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science”

The dismal science is a derogatory alternative name for economics devised by the Victorian historian Thomas Carlyle in the 19th century. The term is an inversion of the phrase “gay science,” meaning “life-enhancing knowledge.” This was a familiar expression at the time, and was later adopted as the title of a book by Nietzsche (see The Gay Science).

It is often stated that Carlyle gave economics the nickname “dismal science” as a response to the late 18th century writings of The Reverend Thomas Robert Malthus, who grimly predicted that starvation would result as projected population growth exceeded the rate of increase in the food supply. Carlyle did indeed use the word ‘dismal’ in relation to Malthus’ theory in his essay Chartism (1839):

“The controversies on Malthus and the ‘Population Principle’, ‘Preventative Check’ and so forth, with which the public ear has been deafened for a long while, are indeed sufficiently mournful. Dreary, stolid, dismal, without hope for this world or the next, is all that of the preventative check and the denial of the preventative check.”

However the full phrase “dismal science” first occurs in Carlyle’s 1849 tract entitled Occasional Discourse on the Negro Question, in which he was arguing for the reintroduction of slavery as a means to regulate the labor market in the West Indies:

“Not a ‘gay science,’ I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science”

Developing a deliberately paradoxical position, Carlyle argued that slavery was actually morally superior to the market forces of supply and demand promoted by economists, since, in his view, the freeing up of the labor market by the liberation of slaves had actually led to a moral and economic decline in the lives of the former slaves themselves.

Carlyle’s view was attacked by John Stuart Mill and other liberal economists.

The teachings of Malthus eventually became known under the umbrella phrase “Malthus’ Dismal Theorem”. His predictions were forestalled by unanticipated dramatic improvements in the efficiency of food production in the 20th century; yet the bleak end he proposed remains as a disputed future possibility. Population control has been proposed as the most likely means to prevent the fulfillment of his predictions.

Occasional Discourse on the Negro

Question

[p.528]

My Philanthropic Friends: It is my painful duty to address some words to you, this evening, upon the rights of negroes. Taking, as we hope we do, an extensive survey of social affairs, which we find all in a state of the frightfullest embroilment, and, as it were, of inextricable final bankruptcy, just at present, and being desirous to adjust ourselves in that huge up-break, and unutterable welter of tumbling ruins, and to see well that our grand proposed Association of Associations, the UNIVERSAL ABOLITION-OF-PAIN-ASSOCIATION, which is meant to be the consummate golden flower, and summary of modern philanthropisms, all in one, do not issue as a universal “Sluggard-and-Scoundrel Protection Society” — we have judged that, before constituting ourselves, it would be very proper to commune earnestly with one another, and discourse together on the leading elements of our great problem, which surely is one of the greatest. With this view, the council has decided, both that the negro question, as lying at the bottom, was to be the first handled, and, if possible, the first settled; and then, also, what was of much more questionable wisdom, that — that, in short, I was to be speaker on the occasion. An honorable duty! yet, as I said, a painful one! Well, you shall hear what I have to say on the matter; and you will not, in the least, like it.

West Indian affairs, as we all know, and some of us know to our cost, are in a rather troublous condition this good while. In regard to West Indian affairs, however, Lord John Russell is able to comfort us with one fact, indisputable where so many are dubious, that the negroes are all very happy and doing well. A fact very comfortable indeed. West Indian whites, it is admitted, are far enough from happy; West Indian colonies not unlike sinking wholly into ruin; at home, too, the British whites are rather badly off-several millions of them hanging on the verge of continual famine — and, in single towns, many thousands of them very sore put to it, at this time, not to live “well,” or as a man should, in any sense, temporal or spiritual, but to live at all-these, again, are uncomfortable facts; and they are extremely extensive and important ones. But, thank heaven, our interesting black population equaling, almost, in number of heads, one of the ridings of Yorkshire, and in worth (in quantity of intellect, faculty, docility, energy, and available human valor and value), perhaps one of the streets of seven dials –are all doing remarkably well. “Sweet blighted lilies “‘– as the American epitaph on the niggar child has it — sweet blighted lilies, they are holding up their heads again! How pleasant, in the universal bankruptcy abroad, and dim, dreary stagnancy at home, as if, for England too, there remained nothing but to suppress Chartist riots, banish united Irishmen, vote the supplies, and wait, with arms crossed, till black anarchy and social death devoured us also, as it has done the others; how pleasant to have always this fact to fall back upon; our beautiful black darlings are at last happy; with little labor except to the teeth, which, surely, in those excellent horse-jaws of theirs, will not fail!

Exeter Hall, my philanthropic friends, has had its way in this matter. The twenty millions, a mere trifle, despatched with a single dash of the pen, are paid; and, far over the sea, we have a few black persons rendered extremely “free” indeed. Sitting yonder, with their beautiful muzzles up to the ears in pumpkins, imbibing sweet pulps and juices; [p.529] the grinder and incisor teeth ready for every new work, and the pumpkins cheap as grass in those rich climates; while the sugar crops rot round them, uncut, because labor cannot be hired, so cheap are the pumpkins; and at home, we are but required to rasp from the breakfast loaves of our own English laborers, some slight “differential sugar duties.” and lend a poor half million, or a few more millions, now and then, to keep that beautiful state of matters going on. A state of matters lovely to contemplate, in these emancipated epochs of the human mind, which has earned us, not only the praises of Exeter Hall, and loud, long-eared halleluiahs of laudatory psalmody from the friends of freedom everywhere, but lasting favor (it is hoped) from the heavenly powers themselves; which may, at least, justly appeal to the heavenly powers, and ask them, if ever, in terrestrial procedure, they saw the match of it! Certainly, in the past history of the human species, it has no parallel; nor, one hopes, will it have in the future.

Sunk in deep froth-oceans of “Benevolence,” “Fraternity,” “Emancipation-principle,” “Christian Philanthropy,” and other most amiable-looking, but most baseless, and, in the end, baleful and all-bewildering jargon — sad product of a skeptical eighteenth century, and of poor human hearts, left destitute of any earnest guidance, and disbelieving that there ever was any, christian or heathen, and reduced to believe, in rosepink sentimentalism alone, and to cultivate the same under its christian, anti-christian, broad-brimmed, Brutus-headed, and other forms — has not the human species gone strange roads during that period? and poor Exeter Hall, cultivating the broad-brimmed form of christian sentimentalism, and long talking, and bleating, and braying, in that strain — has it not worked out results? Our West India legislatings, with their spoutings. anti-spoutings, and interminable jangle and babble-our twenty millions, down on the nail for blacks of our own-thirty gradual millions more, and many brave British lives to boot, in watching blacks of other people’s-and now, at last, our ruined sugar estates, differential sugar duties, “immigration loan,” and beautiful blacks, sitting there, up to the ears in pumpkins, and doleful whites, sitting here, without potatoes to eat; never, till now, I think, did the sun look down on such a jumble of human nonsenses, of which, with the two hot nights of the Missing-Despatch Debate,* God grant that the measure might now, at last, be full! But no, it is not yet full; we have a long way to travel back, and terrible flounderings to make, and, in fact, an immense load of nonsense to dislodge from our poor heads, and manifold cobwebs to rend from our poor eyes, before we get into the road again, and can begin to act as serious men that have work to do in this universe, and no longer as windy sentimentalists, that merely have speeches to deliver, and despatches to write. O Heaven! in West Indian matters, and in all manner of matters, it is so with us-the more is the sorrow! The West Indies, it appears, are short of labor, as, indeed, is very conceivable in those circumstances. Where a black man, by working half an hour a day (such is the calculation), can supply himself, by aid of sun and soil, with as much pumpkin as will suffice, he is likely to be [p.530] a little stiff to raise into hard work! Supply and demand, which, science says, should be brought to bear on him, have an up-hill task-of it with such a man. Strong sun supplies itself gratis — rich soil, in those unpeopled or half-peopled regions, almost gratis: these are his supply; and half an hour a day, directed upon these, will produce pumpkin, which is his “demand.” The fortunate black man! very swiftly does he settle his account with supply and demand; not so swiftly the less fortunate white man of these tropical localities. He, himself, cannot work; and his black neighbor, rich in pumpkin, is in no haste to help him. Sunk to the ears in pumpkin, imbibing saccharine juices, and much at his ease in the creation, he can listen to the less fortunate white man’s “demand,” and take his own time in supplying it. Higher wages, massa; higher, for your cane crop cannot wait; still higher — till no conceivable opulence of cane crop will cover such wages! In Demerara, as I read in the blue book of last year, the cane crop, far and wide, stands rotting; the fortunate black gentlemen: strong in their pumpkins, having all struck till the “demand” rise a little. Sweet, blighted lilies, now getting up their heads again!

Science, however, has a remedy still. Since the demand is so pressing, and the supply so inadequate (equal, in fact, to nothing in some places, as appears), increase the supply; bring more blacks into the labor market, then will the rate fall, says science. Not the least surprising part of our West Indian policy, is this recipe of “immigration;” of keeping down the labor-market in those islands, by importing new Africans to labor and live there. If the Africans that are already there could be made to lay down their pumpkins and labor for a living, there are already Africans enough. If the new Africans, after laboring a little, take to pumpkins like the others, what remedy is there? To bring in new and ever new Africans, say you, till pumpkins themselves grow dear — till the country is crowded with Africans, and black men there, like white men here, are forced, by hunger, to labor for their living? That will be a consummation. To have “emancipated” the West Indies into a black Ireland — ” free,”‘ indeed, but an Ireland, and black! The world may yet see prodigies, and reality be stranger than a nightmare dream.

Our own white or sallow Ireland, sluttishly starving, from age to age, on its act-of-parliament “freedom,” was hitherto the flower of mismanagement among the nations; but what will this be to a negro Ireland, with pumpkins themselves fallen scarce like potatoes? Imagination cannot fathom such an object; the belly of chaos never held the like. The human mind, in its wide wanderings, has not dreamt, yet, of such a “freedom” as that will be. Toward that, if Exeter Hall, and science of supply and demand, are to continue our guides in the matter, we are daily traveling, and even struggling, with loans of half a million, and such like, to accelerate ourselves.

Truly, my philanthropic friends, Exeter Hall philanthropy is wonderful; and the social science — not a “gay science,” but a rueful –which finds the secret of this universe in “supply and demand,” and reduces the duty of human governors to that of letting men alone, is also wonderful. Not a “gay science,” I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; [p.531] what we might call, by way of eminence, the dismal science. These two, Exeter Hall philanthropy and the Dismal Science, led by any sacred cause of black emancipation, or the like, to fall in love and make a wedding of it — will give birth to progenies and prodigies: dark extensive moon-calves, unnameable abortions, wide-coiled monstrosities, such as the world has not seen hitherto!

After this series of blows, the West Indian sugar economy declined precipitously. British import figures indicate that, indeed, the end of the sugar tariff led to a substantial expansion of sugar imports into Britain from outside the British colonies. When Carlyle proposes that British gun-boats be sent to end slavery in Brazil and Cuba (and not, we shall note, to other slave-owning places), it is with eliminating this sugar competition in mind. It is well documented that the Caribbean economy was certainly in dire straits. It was around this time that Thomas Carlyle published his rabid 1849 Fraser’s Magazine essay. He took up the cause of the West Indian sugar barons and condemned what he thought was a conspiratorial union of Exeter Hall philanthropists and free-trade economists against them.

Carlyle’s Gospel

Why this Scottish man of letters took up this peculiar cause — and with so much passion and venom — remains puzzling. But Carlyle’s 1849 essay should not be read merely as a reactionary defense of slavery. There are subtler veins in the paper, consistent with Carlyle’s more youthful Romanticist philosophy. Add to this his personally deeply-held racism and the obvious enjoyment he takes at annoying the bourgeoisie and poking at Christian sensitivities, and his strange choice of subject may become clearer.

To some extent, the West Indian plantation society appealed to Carlyle’s sentiments about idealized “feudalist” societies. Carlyle’s vision was best expressed in his earlier writings, such as Chartism (1839) and Past and Present (1843). He contended that only in a feudalist society, where roles were clearly assigned, could the Puritan ethic of work-for-work’s sake be possible — and that, he held, was the whole purpose of living.

Note that Carlyle never recommended a return to slavery as such but rather a return to something akin to European-style serfdom. Slaves can be sold and bought by masters and thus, unlike serfs, they are not guaranteed constant “life-time employment”, the critical feature of Carlyle’s personal gospel.

This feudalist ideal was something he felt Britain had abandoned to its peril when it set off in pursuit of capitalist industrialization. With capitalism, workers were reduced to nomadism, scavenging and competing for the next shilling in uncertain wages or profits. And if employment cannot be readily found? Then pauperism, idleness and starvation. In Carlyle’s view, the world of British industrial capitalism reduced half the population into nomadic Hobbesian beasts, and the other half into idle paupers. Such an outcome, Carlyle felt, was no better than slavery, and in many ways worse.

CARLYLE v. MILL: BACKGROUND

Thomas Carlyle’s infamous essay, “Occasional Discourse on the Negro Question”, was published in 1849 in Fraser’s Magazine of London. Carlyle revamped this essay and reprinted it in 1853 as a pamphlet entitled Occasional Discourse on the Nigger Question. In response to Carlyle, John Stuart Mill published his own “The Negro Question” in Fraser’s Magazine. Carlyle did not, to our knowledge, respond. But in 1867, Carlyle published his Shooting Niagara — And After? in Macmillan’s Magazine, where he took aim at the Jamaica Committee, in which Mill was actively involved. These are the central exchange of blows in the Carlyle-Mill debate on the “Negro” question. The other essays listed are included for background and context.

In Carlyle’s initial 1849 essay, Dr. Phelin M’Quirk, the purported narrator, is naturally a fiction. “Exeter Hall” refers to the coalition formed in 1830s of liberal dissenting Christians active in the ending of slavery. The “dismal science” is, of course, economics — in fact, the jeer makes its first appearance here. “Quashee” is a derogatory Caribbean term for a “feisty” black slave.

Historical Background

A few historical facts may be worthwhile recalling here. The slave trade to the British colonies was abolished in 1807. After a vigorous campaign led by the abolitionist leader William Wilberforce, slavery itself was finally abolished in the British Empire in 1833. This was accomplished through a deal whereby slave-owners throughout the British Empire would receive some £20 million in compensation plus they would be allowed to keep their slaves for an unpaid “apprenticeship” period of twelve additional years.

However, reports streaming forth from the British West Indies (Jamaica, Barbados, Trinidad, Antigua, Grenada, the Bahamas, St. Lucia, Montserrat, etc.) indicated that the plantation-owners were not using this apprenticeship period for transition, but rather were making arrangements to ensure the continued dependency of the ex-slaves. At an Exeter Hall convention in 1837, a “Central Emancipation Committee (CEC) was formed by Joseph Sturge to push for a quick end to the sham “apprenticeship” period and proceed to the immediate and full emancipation of all slaves in the British Empire. In 1838, a deal was arranged where, in exchange for the end of the apprenticeship and immediate liberation, the plantation-owners would, in turn, stay under the protection of a hefty preferential sugar tariff.

PARETO PRINCIPLE

February 17, 2008 at 4:14 am | Posted in Economics, Financial, Globalization, History, Philosophy, Research | Leave a comment

spin-globe.gif

books-globe.gif

globe-purple.gif

history.gif

world.gif

compass.gif

loudspeaker.gif

pareto.jpeg
PARETO
Born July 15, 1848 Paris, France
Died Geneva, Switzerland August 19, 1923 (aged 75)

Pareto principle

Italian economist Vilfredo Pareto

July 15, 1848, Paris – August 19,

1923, Geneva

The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many events, 80% of the effects comes from 20% of the causes.

Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. It is a common rule of thumb in business; e.g., “80% of your sales comes from 20% of your clients.”

It is worthy of note that some applications of the Pareto principle are appeals to a pseudo-scientific “law of nature” to bolster non-quantifiable or non-verifiable assertions that are “painted with a broad brush”. The fact that hedges such as the 90/10, 70/30, and 95/5 “rules” exist is sufficient evidence of the non-exactness of the Pareto principle. On the other hand, there is adequate evidence that “clumping” of factors does occur in most phenomena.

The Pareto principle is only tangentially related to Pareto efficiency, which was also introduced by the same economist, Vilfredo Pareto. Pareto developed both concepts in the context of the distribution of income and wealth among the population.

Practical applications

The observation was in connection with income and wealth. Pareto noticed that 80% of Italy’s wealth was owned by 20% of the population.

He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied.

It also applies to a variety of more mundane matters: one might guess approximately that we wear our 20% most favoured clothes about 80% of the time, perhaps we spend 80% of the time with 20% of our acquaintances, etc.

The Pareto principle has many applications in quality control. It is the basis for the Pareto chart, one of the key tools used in total quality control and six sigma. The Pareto principle serves as a baseline for ABC-analysis and XYZ-analysis, widely used in logistics and procurement for the purpose of optimizing stock of goods, as well as costs of keeping and replenishing that stock.

In computer science the Pareto principle can be applied to optimization phrases.

Theil index

The Theil index is an entropy measure used to quantify inequities. The measure is 0 for 50:50 distributions and reaches 1 at a Pareto distribution of 82:18. Higher inequities yield Theil indices above 1. [1]

Mathematical notes

The idea has rule-of-thumb application in many places, but it is commonly misused. For example, it is a misuse to state that a solution to a problem “fits the 80-20 rule” just because it fits 80% of the cases; it must be implied that this solution requires only 20% of the resources needed to solve all cases.

Mathematically, where something is shared among a sufficiently large set of participants, there will always be a number k between 50 and 100 such that k% is taken by (100 − k)% of the participants; however, k may vary from 50 in the case of equal distribution to nearly 100 in the case of a tiny number of participants taking almost all of the resources. There is nothing special about the number 80, but many systems will have k somewhere around this region of intermediate imbalance in distribution.

This is a special case of the wider phenomenon of Pareto distributions. If the parameters in the Pareto distribution are suitably chosen, then one would have not only 80% of effects coming from 20% of causes, but also 80% of that top 80% of effects coming from 20% of that top 20% of causes, and so on (80% of 80% is 64%; 20% of 20% is 4%, so this implies a “64-4 law”).

One should not be seduced by the symmetry of the idealised case: 80-20 is only a shorthand for the general principle at work. In individual cases, the distribution could just as well be say 80-10 or 80-30. (There is no need for the two numbers to add up to 100%, as they are measures of different things, eg ‘number of customers’ vs ‘amount spent’). The classic 80-20 distribution occurs when the gradient of the line is -1 when plotted on log-log axes of equal scaling. Pareto rules are not mutually exclusive. Indeed, the 0-0 and 100-100 rules always hold.

Note, however, that sometimes adding up to 100 is indeed meaningful. For example, if 80% of effects come from the top 20% of sources, then the remaining 20% of effects come from the lower 80% of sources. This is called the “joint ratio”, and can be used to measure the degree of imbalance: a joint ratio of 96:4 is very imbalanced, 80:20 is significantly imbalanced (Gini index: 60%), 70:30 is moderately imbalanced (Gini index: 40%), and 55:45 is just slightly imbalanced.

See also

10-90 gap

Benford’s law

Sturgeon’s law

The Long Tail

Vitality curve

Wealth condensation

Zipf’s law

Principle of least effort

Richard Koch

Born July 15, 1848 (1848-07-15)

Paris, France

Died Geneva, Switzerland

August 19, 1923 (aged 75)

Field: sociology, economy, philosophy

Vilfredo Federico Damaso Pareto [vil’fre:do pa’re:to] (July 15, 1848, Paris – August 19, 1923, Geneva) was a French-Italian sociologist, economist and philosopher. He made several important contributions especially in the study of income distribution and in the analysis of individuals’ choices. He introduced the concept of Pareto efficiency and helped develop the field of microeconomics.

Brief biography

Vilfredo Pareto was born of an exiled noble family in 1848 in Paris, the centre of the popular revolutions of that year. His father, Raffaele Pareto (1812-1882) was an Italian civil engineer, his mother, Marie Metenier, a French woman. His family moved to Italy in 1858. In his childhood, Pareto lived in a middle-class environment, receiving a high standard of education. In 1867 he earned a degree in mathematical sciences and in 1870 a doctorate in engineering from what is now the Polytechnic University of Turin. His dissertation was entitled “The Fundamental Principles of Equilibrium in Solid Bodies”. His later interest in equilibrium analysis in economics and sociology can be traced back to this paper.

For some years after graduation, he worked as a civil engineer, first for the state-owned Italian Railway Company and later in private industry. Meanwhile he became increasingly interested in social and economic problems. In 1886 he became a lecturer on economics and management at the University of Florence. His stay in Florence was marked by political activity, much of it fuelled by his own frustrations with government regulators. In 1889, after the death of his parents, Pareto changed his lifestyle, quitting his job and marrying a Russian, Alessandrina Bakunin. He began writing numerous polemical articles against the government, which caused him much trouble.

In 1893 he was appointed a lecturer in economics at the University of Lausanne in Switzerland where he remained for the rest of his life. In 1906 he made the famous observation that twenty percent of the population owned eighty percent of the property in Italy, later generalised by Joseph M. Juran and others into the so-called Pareto principle (also termed the 80-20 rule) and generalised further to the concept of a Pareto distribution.

He died in Geneva, Switzerland, in 1923.

Economic rules

A few economic rules are based on his work:

The Pareto index is a measure of the inequality of income distribution.

The Pareto chart is a special type of histogram, used to view causes of a problem in order of severity from largest to smallest. It is a statistical tool that graphically demonstrates the Pareto principle or the 80-20 rule.

Pareto’s law concerns the distribution of income.

The Pareto distribution is a probability distribution used, among other things, as a mathematical realization of Pareto’s law.

More biography, Pareto’s works, and legacy

In his Trattato di Sociologia Generale (1916, rev. French trans. 1917) published in English under the title The Mind and Society (1935), he put forward the first social cycle theory in sociology.

He is famous for saying “history is a graveyard of aristocracies”.

A great deal of Talcott Parsons’ theory of society is based on Pareto’s works. Parsons aimed at a sociology canon made of Durkheim, Weber and Pareto.

Related concepts:

Pareto efficiency

Pareto distribution

Pareto principle

References

On Line Calculator: Inequality

Pareto principle

Italian economist Vilfredo Pareto


Entries and comments feeds.