Weekly Exchange #13 – Scottish Referendum

I know, I know, this weekly feature is meant to concern itself with underserved stories. But there really is no getting away from the Scottish Referendum this week. Even the Australian press – whose writers and readers are some of the most solipsistic around (unless, of course, there’s a scandal afoot) - have jumped on the band wagon. So, I might as well join them.

First off; how did we get this far? Felix Salmon, one of my favourite financial journalists of recent times, has a brilliant run down. He gives five broad reasons; the European Union, Thatcher and Thatcherites, the GFC, and the perceived elitism/incompetence of Westminster. Despite there being only one poll giving an edge to a Yes victory (although admittedly, the trend is in their favour), Salmon thinks there is enough to get them over the line.  He threw the towel in a couple of days ago. Now, to explain it all to those Americans:

“…the Yes campaign is going to win, just because, given the choice, nations tend to want independence. Especially when they’re voting for a peaceful divorce from a country (more realistically, a city) which doesn’t care about them and doesn’t share their values. Would Scotland be worse off as an independent country? Yes. Is that sufficient reason to vote no? No.”

But if the Yes campaign do take the day, what then? The Economist’s Explainer blog has come through for us again with a brilliant article titled “How to create a country”, handily covering everything from currencies to heads of state:

“Nationalism, it seems, is an easier political sell than the minutiae of public utilities. But the importance of such seemingly small things could be felt for many years after the rousing independence speeches have finished.”

A lot has been made of the No campaign’s rather technocratic and heartless efforts to encourage the Scots to stay. And it has all culminated in a rather bizarre goal line push – large financial institutions paintings pictures of armageddon. Rachel Holmes, a Lecturer at Edinburgh Napier University, has other ideas, pointing out several flaws in the hype:

“There’s a lot of noise surrounding this highly political issue. A look beyond superficial reporting on the idea of banks leaving Scotland shows a different view – not least from what the banks say themselves, but also from what other small countries manage to achieve in terms of their financial services.”

Moving beyond analysis and into argument, a recent editorial in the Financial Times caught my eye. Instead of resorting to pictures of armageddon, the FT has made the case that the Better Together campaign should have been making all along:

“Great Britain stands for an expansive and inclusive view of the world. The union is something precious, not a bauble to be cast aside. In a week’s time, the Scots can vote with a sense of ambition to build on those successes. Rather than retreat into tribalism, they can continue to be part of a nation rooted not just in history and culture but a common destiny which over three centuries has served all so well.”

But the editorial in today’s Observer paints a different picture. According to the Observer,  regardless of which way the vote actually goes, the union will never be the same again. The fact that a referendum is being held, not to mention the machinations of the past two weeks, is going to change everything:

“When Gordon Brown – backed by the three Westminster party leaders – last week promised Scotland “nothing less than a modern form of home rule” if the vote is no, it signalled that the constitutional make-up of these islands is about to change irrevocably.

Ed Miliband goes further: writing for this paper today, he suggests that were he to become prime minister the union would undergo fundamental change. “Scotland’s example will lead the way in changing the way we are governed in England too, with the devolution we need to local government from Cornwall to Cumbria.” Few, if any, people were talking about devolved powers to Cumbria or Cornwall two weeks ago. It is a sign that, regardless of the outcome on Thursday, the first minister, Alex Salmond, has already won a significant victory.”

One of the most infuriating things that has come out of this whole ordeal are the people refusing to take a stand. “It’s for the Scots to decide” they say. Admittedly, the ball is in their court, but this is a vote that will have a profound impact on the entire world. A Yes win will spark more minorities to demand autonomy and secession. One of the largest financial centres will be rocked, as will the global supply of oil. The political makeup of Westminster will be forever altered, as will the memberships of the United Nations, the European Union and NATO (to mention but a few). Every nation whose flag bears the Union Jack will be hoisting a lie. The power may be in the hands of a few million Scots, but this decision will have profound impacts on us all. Not only do we all deserve an opinion, it’s bordering on obscene not to have one.

Having said that, I should probably share my own opinion. Well, as an Australian citizen I completely understand the desire not only for political autonomy, but symbolic autonomy. But as a British Citizen, let alone a citizen of this beautiful world, I am against Scottish Independence. This is a Union that has lasted for centuries, and Westminster has already promised a confounding array of sweeteners. And there are just too many unknowns. How long can Scotland last as a Petro-state (prices fluctuate and projections aren’t bankable)? How can they hope to operate with a co-opted currency and zero control over Monetary policy? How much of the UK’s debt will be taken on? How will the control of the North Sea oil be divvied up (and what precedents will it set for other countries)? And on and on. While the No campaign has focused on technicalities and and forgot the heart, the Yes campaign has focused on the heart and forgot the technicalities. Add the bitter resentment that will force the UK to fight hard on all these negotiations, and we don’t have a pretty picture.

That’s all for this week. Catch you again next week. Same bat channel.


The Weekly Exchange was first published on Joshnicholas.com. Sign up to receive the Weekly Exchange.

On fighting terrorism and military intervention

There wasn’t much to be surprised about when The Australian published the results of a recent Newspoll yesterday; three in five Australians support their government’s drops of humanitarian and military aid to fighters in Iraq. Prime Minister Tony Abbott is just the latest in a line of politicians to enjoy surging support because of hawkish behaviour. What may have made them drop their toast was the next line, however;

“The Prime Minister said no specific request had been made but Australia was talking to its partners and allies about helping to provide “military advisers” and “air capability”.”

That’s right. As US President Barack Obama releases his “game plan” for Iraq and Syria, the Australian government is openly musing about joining in.

But after a decade at war, why do the public support more adventurism? And is charging once more into the breach any sort of tactic against these hydra-esque terrorists groups? To answer these questions I had a chat with Professor Greg Barton, Director at the Global Terrorism Research Centre at Monash University:



(Image:The U.S. Army/Flickr)

As before, I am unable to embed audio in the email blast. You can take a listen at Soundcloud.


Weekly Exchange #12 – NATO

The conference of the world’s mightiest heroes – otherwise known as the NATO Summit – captured a lot of attention this week. And not just from those surprised to learn that NATO is still a thing. New “enhanced partners” were inducted, and a number of measures directed toward’s the crisis in the Ukraine were announced. From the White House’s official blog (emphasis added):

“…we agreed to be resolute in reassuring our Allies in Eastern Europe. Increased NATO air patrols over the Baltics will continue. Rotations of additional forces throughout Eastern Europe for training and exercises will continue. Naval patrols in the Black Sea will continue. And all 28 NATO nations agreed to contribute to all of these measures — for as long as necessary…

…to ensure that NATO remains prepared for any contingency, we agreed to a new Readiness Action Plan. The Alliance will update its defense planning. We will create a new highly ready Rapid Response Force that can be deployed on very short notice. We’ll increase NATO’s presence in Central and Eastern Europe with additional equipment, training, exercises and troop rotations. And the $1 billion initiative that I announced in Warsaw will be a strong and ongoing U.S. contribution to this plan…

…our Alliance is fully united in support of Ukraine’s sovereignty, independence and territorial integrity and its right to defend itself. To back up this commitment, all 28 NATO Allies will now provide security assistance to Ukraine. This includes non-lethal support to the Ukrainian military — like body armor, fuel and medical care for wounded Ukrainian troops — as well as assistance to help modernize Ukrainian forces, including logistics and command and control…”

NATO is well and truly throwing it’s lot behind Ukraine, then. Finally enacting the Rapid Response Force that countries like Poland have been calling on for so long, and adding more fig leaves (a.k.a “partners”). But as quick on the trigger as ever, here is The Economist with some insightful analysis, biting criticism, and suggestions for how the West should be going even further($):

“Above all, Mr Putin cares more about the outcome than the West does. His geopolitical paranoia, his obsession with the territory lost at the end of the cold war, and the personal prestige he has staked on victory make it essential. And he has a modern army he is willing to use. Because of these imbalances Mr Putin is winning, at least by his own warped calculus…

…it is past time for the alliance to junk the undertaking it gave Russia not to base troops in the Baltics: that was made in an era of goodwill, which Mr Putin has trampled. The Europeans must do more to wean themselves from Russian gas, by diversifying supplies and introducing new rules and infrastructure to trade energy across the continent. Mr Putin is not a good commercial partner…”

But these are all democracies, after all. What do the people have to say? According to the boffins at The Conversation, it seems like the populations of some core NATO countries are ambivalent at best.

“it seems the British public takes a more favourable view of NATO than the French. A slight majority of UK respondents (51%) favoured greater military co-operation between NATO and their own military. The appeal of this option is slightly lower in France, at 45%…

…Only one third of British and French respondents believed that expanding NATO troops into Eastern Europe would serve to provoke Russia. But they didn’t show great enthusiasm for sending troops from their own country into the area…”

And now we come to the darling of realists, Professor Stephen Walt. Walt pummels the steps that have allowed NATO to survive so long, and stops just short of accusing NATO bureaucrats for engineering the whole situation in order to inject some more meaning into the dwindling alliance:

“NATO’s survival after the Cold War remains something of an anomaly. Alliances normally arise in response to threats, and many previous alliances collapsed quickly once the external danger was gone. Mindful of this tendency, NATO’s proponents have been searching for a convincing rationale for its continued existence ever since the Berlin Wall fell…

…Until the Ukraine crisis arose, NATO looked like a nearly extinct dodo that had somehow managed to last into the 21st century…

…The real challenge NATO faces is the classic dilemma of collective action, made all the worse by the modest nature of the threat to which NATO is now trying to respond. This problem is why NATO’s new members are working overtime to convince others — and especially Americans over in the Western Hemisphere — that Russian President Vladimir Putin is History’s Greatest (or Latest) Monster…

…There will be the usually pious declarations about enhancing defense capabilities, and a new set of exercises will be planned, provided they don’t cost too much. But eventually the war fever will break, and NATO Europe will return to its enfeebled military condition and diplomatic disarray.”

Australia is one of NATO’s newly minted “Enhanced Partners“, a promotion undoubtedly kindling the fire of those with Southern Cross tattoos. But almost immediately questions arose; what does this mean exactly? What benefit is derived from such a status, and does it come with obligations? Will Australia be expected to take on an even larger role in America’s military adventures? Here is an extended interview I did this week with Dr Adam Lockyer, Fellow at the United States Studies Centre here in Sydney, to get some answers to these questions:

(Image: UK Ministry of Defence/Flickr)

As before, I am unable to embed audio in the email blast. You can take a listen at Soundcloud.

After our interview Dr Lockyer took to the ABC’s Drum to unpick the implications on Australia’s foreign policy a bit more. On the whole it is a rather scathing review of the current government’s policies, which he views as consequence of having drunk the “Western values Kool-Aide”:

“This move is designed to tie Australia even more closely with countries that share its values and ideology. The change in Australia’s status in Brussels will do little to directly improve Australia’s security. But, that is not the intention. It is designed to make it easier for Australia to join with the Western European nations in the defence of its values around the world…

…Shared values are not synonymous with strategic and national interests. In fact, they are completely unrelated. Strategic and national interests are the basis for sound foreign policy making, not shared values. At times, shared values and interests overlap, like in relation to the US-Australia alliance. But this is largely a coincidence and the alliance’s value to both parties has fluctuated over time.

That’s all for this week. Catch you again next week. Same bat channel.


The Weekly Exchange was first published on Joshnicholas.com. Sign up to receive the Weekly Exchange.


On NATO and Enhanced Partners

Australia woke up this week to the rather bizarre news that we are being promoted to “enhanced partner” in the NATO military alliance. For many, NATO is a Cold War relic, relegated to the same part of obscure memory as the Star Wars defence system and tearing down walls. It played almost no part in the wars in Iraq and Afghanistan, and has otherwise been featured on front pages more as a rhetorical device than as a military coalition (recent machinations over Ukraine are a great example).

But with Australia’s newly enhanced role in this coalition I decided to find out what NATO does get up to nowadays, and what it means for Australia specifically. The answer was surprising (put away your grainy stock images of Cold War NATO). The following is the quick chat I had with Dr Adam Lockyer, Senior Lecturer at Macquarie University and a fellow at the United States Studies Centre at Sydney University:



(Image: UK Ministry of Defence/Flickr)

As before, I am unable to embed audio in the email blast. You can take a listen at Soundcloud.


Weekly Exchange #11 – Ransoms

“We do not make concessions to terrorists,” [State Department Deputy Spokesperson Marie] Harf told reporters. “We do not pay ransoms.”


But should the United States pay ransoms? Should the United States have stumped up the $132 million ISIS reportedly demanded in exchange for journalist James Foley? Should America try and negotiate the release of the other Americans currently held around the world? After all, other countries, notably those in Europe, do pay for the release of their citizens. This is the debate currently underway as James Foley's beheading continues to reverberate through the media, and fellow American journalist Steven Sotloff awaits his fate. And this is the theme of this week's exchange.


First off, an incredible investigation into ransoms by the New York Times, published just on a month ago. It begins in 2003, with three suitcases containing 5 million euros heading into the Sahara Desert. It then moves on to other episodes, revealing an intricate sequence of kidnappings and payoffs (often disguised as “aid”) that the US State Department claims is bankrolling terror:


“The stream of income generated is so significant that internal documents show that as long as five years ago, Al Qaeda’s central command in Pakistan was overseeing negotiations for hostages grabbed as far afield as Africa. Moreover, the accounts of survivors held thousands of miles apart show that the three main affiliates of the terrorist group — Al Qaeda in the Islamic Maghreb, in northern Africa; Al Qaeda in the Arabian Peninsula, in Yemen; and the Shabab, in Somalia — are coordinating their efforts and abiding by a common kidnapping protocol.


To minimize the risk to their fighters, the terror affiliates have outsourced the seizing of hostages to criminal groups who work on commission. Negotiators take a reported 10 percent of the ransom, creating an incentive on both sides of the Mediterranean to increase the overall payout, according to former hostages and senior counterterrorism officials.”


As the New York Times' investigation notes, repeatedly, it is the continental European countries that seem most inclined to stump up to get their citizens back. But what is the rationale for countries like Britain and the United States not to? The Economist explains:


“America's policy has developed over time. In the early 1800s the founding fathers stopped paying African rulers for protection from pirates, leading to the Barbary wars. In 1980, after Iranian revolutionaries took 52 Americans hostage, President Jimmy Carter made the policy explicit: “Our position is clear. The United States will not yield to blackmail.” In 2002 George W. Bush reiterated America's stance, saying, “We, of course, don’t pay ransom for any hostages…

…According to David Cohen, a Treasury official who deals with terrorist finances, “Ransom payments lead to future kidnappings, and future kidnappings lead to additional ransom payments. And it all builds the capacity of terrorist organisations to conduct attacks.”


In a column in Politico magazine, Tom Ricks provides one of the most compelling points of view – that of a journalist who has reported from Iraq. His take? He supports the US Government's non-negotiation policy:


“One day in 2007, I was being shown my bedroom at the Washington Post’s bureau and house in Baghdad, where I was spending some time covering the U.S. military side of the war. I noticed an old AK-47 rifle leaning against the wall near the door of my room. The Post’s local security chief, a tough-minded Iraqi, explained that it was for me to use “if they come into the house.” When I heard “them” come upstairs, he advised, I should fire most of the weapon’s magazine through the door, which might hold them off for a few minutes. But, he added, “save one for yourself.”


Moving from the perspective of someone who could be kidnapped to someone who would have to negotiate a ransom, Steve Coll takes us into the training of a Washington Post “operations cell” – a team setup to respond incase one of their journalists is abducted:


“Ransom negotiations are different from other business bargaining, because you don’t sit with your counterpart face to face. It’s harder to read body language and signals. Ransom talks are a call-and-response process, with time lags and some uncertainty about how the other side is hearing your messages. These gaps create risk. The question facing a corporation in our position, he said, would be: What’s your opening bid? This was where our consultant wanted clarity. “There are consultants out there—you can work with them if you want—that will tell you, ‘Open with twenty per cent of the market price.’ That’s a way to go. But I don’t do that. I open at about eighty per cent.

“Twenty per cent,” he continued, “twenty per cent—that’s where you get your mutilations.” Fingers, ears. We indicated our firm agreement with his thinking, should it ever come to that.”


And finally, James Traub gets straight to the heart of the matter and dissects whether paying a ransom would have saved James Foley:


“This raises an agonizing question: Should states pay ransom to kidnappers? If you are a friend or loved one of the victim, the answer is obviously yes. But even a more remote observer could cite the moral argument that the obligation to treat people as ends rather than means — what Kant calls the “categorical imperative” — forbids one to place the life of the abductee in a balance with abstract goods, like “sending a message” that kidnapping doesn't pay. In any case, the consequences of capitulation are remote and hypothetical; the life is terribly real.”


For my own part, I honestly don't know where I stand on this issue. There is no disputing that the kidnapping industrial complex appears to go after Europeans because their countries will pay. But it would be too simple to merely take this statistic as justification for the policies of the United States and Britain. Similarly with the fact that Al Qaeda and others have integrated Kidnapping fundamentally into their operating model. After all, these terror groups are anything if not enterprising. Does anyone believe they wouldn't find another source of revenue? At the same time, America's policy has hardly given it's citizens a free pass. Just look at the amount of American's currently languishing around the world, with little hope that their country will come to their rescue. And who can rightly state there would be more if the US were to negotiate. No, there is no simple answer to this dilemma. No matter what the opinion pages claim. Just endless grey.


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