Wednesday, June 14, 2006

Petropolitics Laws of Thomas Friedman

Thomas Friedman of The New York Times wrote an article entitled “The First Law of Petropolitics” which appeared in May/June 2006 issue of Foreign Policy Magazine. Since the article is behind a firewall it is better to look at here.

By rediscovering the world Mr. Knows Everything (Friedman) he recently came up with the conclusion that the world is flat.

He claims that we are in a totally new world due to four basic reasons.

1. We [don’t know exactly what he means with that] are in a War on Terrorism [a created ghost] in which we are funding both the US military and the regimes that support Islamic terrorism by buying oil.

2. If we [I think here he means the Americans] do not find an alternative way to satisfy the energy needs of the new 3 million consumers from India, China, Brazil, the Soviet Union, the world will burn up. [and at that time Friedman will become Freidman].

3. Green energy technologies etc will be “the growth industry of the 21st century to satisfy all of these new consumers.” He renames green as “geostrategic, geopolitical, capitalistic, patriotic.” “Green is the new red, white and blue,” he argues. [colors of the American flag. As if Americans and especially the American government is Green].

4. The First Law of Petropolitics: The price of oil and the pace of freedom operate in an inverse correlation. Petroauthoritarianism (“authoritarian regimes that are using their huge oil windfalls to ensconce their authoritarianism and power”) he says is “weakening, for now at least, the global democratization trend.”

This is basically all the things he claimed that created such a fuzz.

Now, let us have a look at his “first law of petropolitics”

He drew a “graph” with two axes. One is supposed to be the price of oil dating from 1979 to the present, and the other is “the pace of freedom”. The figure inside the “graph” is roughly a diamond shape. So, he concludes that “as the price of oil went down from 1979 to the mid-1990s, “the pace of freedom” in “petrolist states” went up.

He defines petrolist states as the states either with weak institutions or authoritarian governments that are overwhelmingly dependent for their GDP on oil.

His interpretations of his “graph” are as follows:

“There appears to be a specific correlation between the price of oil and the pace of freedom. The price of oil and the pace of freedom always move in opposite directions in petro-ist states.”

“as the price of oil goes down the pace of freedom goes up in countries like Nigeria, Iran and Russia, and as the price of oil goes up the pace of freedom goes down, and the lines actually cross in all of these graphs.”

“As the pace of freedom declines, the price of oil goes up; as the price of oil goes down, the pace of freedom increases.”

All these quotes look the same ? In fact no, I will come to that in a bit.

His conclusion: “Given the inverse relationship between the price of oil and the pace of freedom in petro-ist states, any U.S. strategy for promoting democracy in these countries is doomed to fail unless it includes a credible plan for finding alternatives to oil and bringing down the global price of crude.”

Now, besides Friedman is a good example of statistical illiteracy, he is also making no sense.

Firs of all, correlation DOES NOT mean or DOES NOT necessarily imply causation.

Motorway driving and holidays are probably highly correlated. To draw the conclusion that motorway driving causes holidays or vise versa would however be wrong.

Over some years a person's age might be perfectly correlated with the price of oil, but nobody would say one is the cause of the other.

You may find that an increase in the local birth rate was correlated with the annual migration of storks over the town. Does that mean that the storks brought the babies? Or that the babies brought the storks ?

Most people die in bed. So, should we conclude that bed is the most dangerous place to be?

Statisticians call this sort of thing a "spurious correlation," which is a fancy term for "total coincidence."

Since he cannot understand the difference between causation and correlation and association he makes the same mistake over and over again.

His definition of resource curse: The negative effect of natural resource overabundance on political and economic reform in any country.

Oh yes, he is not alone. There are thousands if not millions of people out there who claim the same. Of course, with no concrete statistical base proving it.

Now, how come he finds such an association between oil price and freedom? To understand that one should look at the variables he used. He used “Freedom index” of the Freedom House. And how this index is constructed is beyond our understanding. Those kinds of indexes are purely nonsense.

He argues that the countries in the Middle East are feeding their people “in the form of state-owned jobs – government jobs, state-own industries, protected industries and buying off opponents.” He calls this “a massive misallocation of wealth. They can continue doing so as long as oil price is high. But if the prices come down they will see the biggest social explosion anywhere on the planet.”

Great logic. Bravo!

Another example of Friedman’s statistical illiteracy on the video I cited at the beginning”

He talks about the evidence of a poll.

“We asked people, are you in favor of a gasoline tax? it was 87 percent against, 12 percent in favor, okay? Then we redefined the question. We said, are you in favor of a gasoline tax if it will make us energy independent of some of the worst regimes in the world? I believe it was 52 or 53 percent in favor, 30-something against. Are you in favor of a gasoline tax if it will combat climate change? I believe it was 59 percent in favor, 30-something against.”

“Now, think about this for a second. What those polls told you is that two-thirds of Americans are ready to support a tax that not a single party or member of the Senate so far has actually put on the table. That’s amazing.”

What is actually amazing is that a three times Pulitzer price winner is amazed by a result of poll. I guess he has no idea about polling as well as has no idea about how to interpret a poll result.

I also made a poll. My sample size is three Friedmans. Thomas Friedman of NYT, George Friedman of Stratfor and Milton Friedman, supply side economist. And I come to the conclusions that all Friedmans are arrogant idiots! This is how Thoman Friedman's logic works.

Dear Mr. Friedman. Please buy Darrell Huff’s book “How to Lie with Statistics” which is a classic. Or get a copy of “Damned Lies and Statistics: Untangling Numbers from the Media, Politicians and Activists” by Joel Best. Those are the best ones I ever read on lies and statistics. Best has another book on the same subject published in 2004 but I have’t read it yet.

He again makes a ridiculous generalization: “globalism, of moving toward freer and freer unrestricted trade in the world, has probably lifted most boats”

Whose boats Mr. FrEIDman?

More stupidity? Yes, he has a lot. Look at his claim: “oil destroys democracy”

This is probably his second law of petropolitics.

Friedman is well known with his support of Iraq war (see for example his interview with Amy Goodman):

“we’re actually there to try to establish a decent democratizing regime, and it’s not about oil…. Unless we bring the price down, Iraq is just going to become another petro-state,”
And that is his third law of petropolitics.

And yet this guy is considered to be one of the best intellectual! To Friedman, he really is anyway!

In his Op-Ed in the New York Times on January 6, 2006, Thomas Friedman pointed out at the US energy dependency and the need to make US environmentally green.

“The biggest threat to America and its values today is not communism, authoritarianism or Islamism. It's petrolism” says Friedman. He uses petrolism as a term for the corrupting, antidemocratic governing practices that result from high oil prices. Petrolism, he elaborates “is the politics of using oil income to buy off one's citizens with subsidies and government jobs, using oil and gas exports to intimidate or buy off one's enemies, and using oil profits to build up one's internal security forces and army to keep oneself ensconced in power, without any transparency or checks and balances.”

Here is his logic of grouping countries

1) Petrolist states where people get rich by being in government and sucking the treasury dry,
a. Authoritarian petrolism (in Russia, Venezuela, Nigeria, Sudan and Central Asia)
b. Islamist petrolism (in Sudan, Iran and Saudi Arabia)

2) Non-petrolist states (like Taiwan, Singapore and Korea) where people get rich by staying outside government and building real businesses.

What a nonsense! Where does he put developed countries such as his and Italy, where people get (very) rich both by being in the government and keeping their business at the same time?

On one point he is right though: “A democratization policy in the Middle East without a different energy policy at home is a waste of time, money and, most important, the lives of our young people.”

But then he makes another absurd remark:

“There is a huge difference in what these bad regimes can do with $20-a-barrel oil compared with the current $60-a-barrel oil. It is no accident that the reform era in Russia under Boris Yeltsin, and in Iran under Mohammad Khatami, coincided with low oil prices. When prices soared again, petrolist authoritarians in both societies reasserted themselves.”

Excuse me Mr. Friedman, if you were a little bit smart you would have checked who got richer and how income was distributed in those countries in Yeltsin and Khatami era.

And then he mixes apples with oranges:

“We need a president and a Congress with the guts not just to invade Iraq, but to also impose a gasoline tax and inspire conservation at home. That takes a real energy policy with long-term incentives for renewable energy -- wind, solar, biofuels -- rather than the welfare-for-oil-companies-and-special-interests that masqueraded last year as an energy bill.”

He is right in the first sentence but screws up in the second one. Someone should teach him you cannot make gasoline from wind and solar and to my knowledge no cars run on them.

How about his conclusion?

“Enough of this Bush-Cheney nonsense that conservation, energy efficiency and environmentalism are some hobby we can't afford. I can't think of anything more cowardly or un-American. Real patriots, real advocates of spreading democracy around the world, live green. Green is the new red, white and blue.”

Great! Now try to live as you say just for one day, Mr. Friedman. Then you will understand that “green” is just a five character word in your language.


At 5:09 PM, Anonymous Anonymous said...

Please learn how to speak our language before leveling criticism on Pulitzer Prize winning journalists.

Your criticism seems disingenuous when it appears to have been written by a 13 year old in study hall.


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