This week all the news services carried a story about the Dutch central bank shipping many, many tons of gold from the Mad King-led United States to the custody of cooler heads (well, cooling, we hope, after that very hot summer) in London.

On the same day, the FT ran a story by Banu Baweja at UBS Investment Bank about how lots of people keep wanting to buy gold. Prices have eased a bit lately, but there is still plenty of demand, which they reckon will keep going. The Mad King and his only-slightly-less-mad Court are part of it, making the American finance products people generally use to try to balance out risk from other activity a bit suss.

But also, when the world cancelled foreign exchange reserves held by that other mad king in Russia, the UBS folk reckon people have started getting a bit suss on all money. “Reserve and asset managers globally were left confronting a simple question: if $630bn held in Treasuries, Bunds, gilts and other bonds coule become inaccessible overnight, what constituted money?”

Apparently gold is the answer.

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… but that won’t change any minds

It’s now six months since the US-Israel war on Iran began with air attacks which killed the Iranian leader Ayatollah Khamenei as well as around 200 schoolchildren. The war has dragged on a long time. But before that surprise attack, it had appeared that the US planned to rely on naval power to coerce the Iranian regime into submission.

Early in February 2026, Trump deployed a carrier strike group (CSG) to the region, with a second arriving shortly afterwards. This show of force was described (with a striking lack of historical awareness) as an “armada”. The lead ship of that group, the USS Abraham Lincoln, is now limping home after what is generally admitted to have been a disastrous tour of duty.

As many people have pointed out to me over the years, I’m not a naval expert. But I can count. So, when the armada arrived, I checked the numbers and concluded that the threat was a hollow one.

The escorts are critical. They provide missile defence using AEGIS and Sea Sparrow systems, and once their interceptor stocks fall to low levels they must withdraw to be replaced or rearmed.

This creates an arithmetic problem. A Hobart-class destroyer has 48 blocks, each capable of carrying one AEGIS-controlled SM-2 or SM-6 interceptor. Alternatively, each block can carry four Sea Sparrows, but these are less capable.

Standard USN doctrine calls for the use of two defensive missiles against each incoming missile. On the assumption of 100 usable missiles per escort, that’s 50 defensive actions per escort or 200–250 in total. No one knows how many missiles Iran has available, but typical estimates suggest at least 3000, of which 1000 or more could be used in an anti-ship capacity. Even assuming successful air attacks on launch sites, use of aircraft against missiles, etc., hundreds of missiles will pose a threat, and at least some of them will cause enough damage to force escorts to withdraw.

A carrier-based bombing campaign couldn’t be sustained for even ten days without exhausting the carrier group’s defences and requiring the USN to “declare victory and go home”.

As it turns out, I wasn’t the only one who could count. The Center for Strategic and International Studies (a hawkish and generally navalist think tank) looked at the numbers and concluded that the available force could do some damage but not enough to produce regime change. And, pretty clearly, the US military drew the same conclusion, except for the bit about going home.

Like CSIS, I didn’t expect a massive air campaign beginning with the killing of the top Iranian leadership. But once the full-scale war began, the vast majority of the attacks were made by land-based aircraft. The carrier-based air arm fired most of its Tomahawks from a safe distance, with only modest effects. Iran responded by attacking land bases with a level of success that could have produced a catastrophe if it had been focused on the navy.

The role of the USN was reduced to its long-stated mission of keeping vital sea lanes open. When that failed, it shifted to the secondary task of imposing a blockade on Iran. Unsurprisingly, this has not produced a surrender — no naval blockade in recorded history has forced an adversary nation to surrender without the deployment of land forces.

Meanwhile, it is reported that the costs of the futile campaign have wrecked the Navy’s budget. A Navy official, quoted in the Guardian, says:

The money for payroll was robbed to pay for overseas contingencies and is being backfilled by money that hasn’t been spent. They are backfilling payroll so we get enough money in our paycheck.

More succinctly, a former official said:

They’re fucked. They shot all their weapons; they trashed all their ships; they ran out of their money.

The 2020s haven’t been a great decade for navies. The Russian invasion of Ukraine began with the destruction or capture of almost the entire Ukrainian navy. Then, despite having no navy of their own, the Ukrainians wiped out much of the mighty Black Sea Fleet, with the remnants sheltering in a Russian port as far away from Ukraine as they can get.

The Iranian war began similarly. The destruction of the Iranian Navy was rapid and complete. The most notable feature was the perfidious sinking of a ship returning from a training exercise in India, with the survivors of the initial attack being left to drown, even though their rescue would have posed no risk.

The US Navy suffered nothing more than the failures described above, but that was bad enough. Following the earlier failure to dislodge the Houthis, who now control access to the Red Sea, it is clear that naval forces cannot reliably keep trade lanes open or defeat even a low-level land-based opponent.

But having been through many rounds of this debate, I am confident that nothing will persuade navalists that their beloved flat-tops and frigates are little more than floating targets. Pirates, grey zones, reconnaissance, diplomatic visits, disaster relief and tiger-repelling rocks will all be wheeled out. Still, for any government in serious fiscal trouble (and aren’t they all), reducing the navy* to a coast guard would save a heap of money that would otherwise be wasted.

Anticipating this, I won’t reply to any comments restating points of this kind. If you have something actually new to say, go ahead.

* I haven’t talked about submarines here. The doomsday machines waiting to unleash nuclear Armageddon from the deep ocean floor are too much for me to think about. The ordinary kind, designed to sink ships from concealment, now seem like an expensive way of doing the job of a low-cost missile or drone, and even their invisibility is a depreciating asset.

We are being flooded with spam coming from fake gmail.com addresses at the moment. So, for the moment, I’ve set our spam filter to delete everything from gmail.com

If you want to post a real comment, just give a spurious address like anon.com and use your existing name/nym. Although we ask for an email address, we almost never check that it’s real. If you have trouble with that, email me at john.quiggin@icloud.com

Hopefully, we will find a way around this soon.

Also, Google is Evil.

I wrote this post a couple of weeks ago, responding to a challenge* to write about the economic aspects of Taylor Swift. Not long after that, the world lost the marvellous Dolly Parton. Parton’s lifetime income almost certainly exceeded a billion dollars, but she gave huge amounts away.

Her biggest philanthropic endeavour was the Imagination Library, which sends free books to children every month from birth to age five. There are currently 3 million children enrolled, and the program has given away over 300 million books.

That didn’t leave Parton poor. Her estate was estimated at $400 million, mostly tied up in property rights of the kind discussed below — copyrights and her theme park, Dollywood. She lived well, in a substantial house on 60-odd acres of land just outside Nashville. But lots of people have substantial houses and, at least for an Australian, 60 acres doesn’t sound like much. More notable was her ostentatious, but deliberately cheap, self-presentation — rhinestones rather than diamonds.

Now for a repeat of the Taylor Swift analysis.

The claim “Every billionaire is a policy failure” is pretty widely accepted these days, formulated most clearly in Ingrid’s case for limitarianism (a hard cap on the maximum wealth anyone can have). Looking at the Forbes list of the richest people in the world (one woman in the top 20), it’s hard to disagree. Most are thoroughly objectionable, and even those who aren’t personally appalling mostly made their money from monopoly (for example, Warren Buffett) or inheritance (members of the Walton family).

But what about the good billionaires, a category for which Taylor Swift (ranked about 2000 in the list) seems like the ideal example? Before her, there was J. K. Rowling, but look how that turned out. Swift seems to tick all the boxes. Apparently a nice person (if you ignore the promotional feuds with other celebrities), generous with her money, treats her employees well, politically progressive without being obnoxious about it, and a philanthropist, though nothing like Dolly Parton.

And she’s made her money honestly, selling records and concert tickets to people who want to buy them. Revealed preference arguments need to be treated with care (Tom Slee’s No One Makes You Shop at Walmart is the classic here), but Swifties have plenty of alternatives on offer. At the margin, a dollar spent on Swift is a dollar less for other entertainers, but that’s not a consideration we usually regard as relevant in our current system.

So, if there’s a problem with Swift’s wealth, it’s not a problem with her, but with the system that makes such massive wealth possible. For Swift, that comes about in several ways.

First, the money she makes from selling records and merchandise depends on the system of “intellectual property” (in this case, mostly copyrights and trademarks). Unlike many entertainers, she’s been highly successful in capturing this for herself rather than letting record companies grab it.

Second, her returns from ticket sales to her concerts depend on the availability of stadiums. These are sometimes explicitly subsidised by the public and always dependent on land-use regulation.

Finally, the returns she gets when she invests her wealth are higher than those available to ordinary households. This is at the core of the r > g point made by Piketty a while back.

These compounding effects would be greatly reduced by a more progressive income tax system (a top marginal rate of 70 per cent) and by wealth taxes, capturing the excess returns to high wealth. In combination, these would make it very difficult to become a billionaire by entertaining people. Other measures would be needed to deal with the massive accumulations of corporate wealth represented by the multibillionaires.

Given her dependence on the society that made her wealth possible, Swift can have no legitimate moral objection to a tax system that shares it out more evenly. But is there an economic cost here? The standard story is one about incentives and effort. But it’s hard to believe that Swift would write fewer songs, or perform fewer concerts, if the return were in the hundreds of thousands rather than millions or billions. And, as I already observed, most of the ultra-rich have made their money in actively harmful ways. Even where there is an actually useful product involved, the super-profits have come mostly from monopoly or speculation.

In summary, in a society which produces billionaires, there’s no reason to object to Taylor Swift becoming one. But we could have all the music we need or want in a society without billionaires. Indeed, with policies like a participation income or livable income guarantee, we could see a lot more people making music, some of which might turn out better than what the industry currently gives us.

* In support of my fundraising for the Brisbane to Gold Coast ride against cancer, which was hugely successful. Thanks, everyone!

A couple of years ago, I edited a volume on pluralizing political philosophy, in particular in relation to economic and ecological inequalities. It was put together under the Covid-pandemic, so we had to swap the authors-conference for online meetings, with the authors spread out from China to Argentina. Sometimes the people in the most unfavorable timezones joined us literally in the middle of the night. I have always been very grateful to the contributors for running the extra mile under those circumstances, and some of the contributors gave the book what I am suspecting have been their darlings – papers on which they either had been working for a long time, or else papers that contained really original ideas. The book also includes a separate part with discussions of the main papers.

Against that background, I felt a little sad that (to the extent that I have been able to find out) the book hasn’t been picked up much. The first and so far only book review (in the Erasmus Journal of Economics and Philosophy) came out last week. But now one of the contributors, Krushil Watene, wrote to say that she has been teaching a course on the book, which is wonderful. If her students read this, they are very welcome to let us know their comments and impressions of the various chapters, including whether they think the book works for teaching (my assumption has been that it should be really useful for teaching, since it basically has all these different perspectives and arguments on why to pluralize political philosophy and how to do so, also if one is still on square one. But, as always, the proof of the pudding is in the eating.) And the book can still be downloaded for free.

At the end of a glorious day hanging out at galleries, antique shops and the pub with friend and historian Matt Allen we walked to the station at Blackheath in the Blue Mountains, Australia (where I live) for Matt to get the train back to the city. We were confronted with this glorious mural representing a bushranger named Govett, leaping off the cliff with gun in hand and bags of gold strapped to his horse. How gleeful is he? Ecstatic with ‘you’ll never catch me alive’ liberation – short-lived though (what with gravity and the considerable depth of the valley) his life or liberty from here on must surely be. Also RIP horsey.

Image: mural of Govett’s Leap at Blackheath railway station.

That is not a period weapon, said Matt, ever expert on colonial Australia. And I dunno, I answered. If I were carrying bags of gold I don’t reckon I’d label them with GOLD in big black letters.

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Ceuta, the small Spanish enclave on the coast of North Africa, has been in the news lately.  And I’ve seen a couple of articles mentioning that Ceuta has been a Spanish possession since 1668.

Which triggered my inner history nerd, because on one hand actually Ceuta has been under the Spanish crown since 1560, not 1668.  And also, Ceuta has been under European control for even longer, because the Portuguese conquered it way back in 1415.  That’s knights-and-castles time, most of a century before Columbus.

[a long day of street-fighting with swords and axes]

So why 1668?  Because in 1560, Spain took over Portugal and all Portuguese possessions.  Then eventually the Portuguese rebelled against Spanish rule.  Which led to a protracted war of independence that wasn’t resolved until 1668 when, as part of the final treaty / divorce settlement, Spain got Ceuta.

Meanwhile, in Alaska, archeologists have found about a dozen glass beads of European origin.  They’re either Venetian glass beads, or French copies.  What makes these particular beads interesting is that, depending on which group of experts you believe, they are from sites that date either to the late 15th century, or the late 16th century.  Either way, these beads were in Alaska long, long before any European.

[around 500 years, give or take]

These two facts — the Portuguese conquest of Ceuta and the Alaskan glass beads — are related.  What connects them is, of course, deflation.

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A summer anecdote: when on holidays in France, on a sunny August day, we visited a castle garden in rural Normandy. When buying the tickets, we got the usual: “Your postcode or country of origin?” We said “Germany,” and suddenly the face of the young woman at the counter lit up. “Would you mind doing us a favor?,” she asked, while fishing a piece of paper from a big pile – it turned out to be a German version of the leaflet about the garden. “We’ve recently made those, but they need to be checked. Would you mind having a look?” “Sure,” we said, and asked for a pen to insert whatever corrections might be needed.

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Yesterday, I ran my first gimmick promotion for the Brisbane to Gold Coast Ride against Cancer [1]. I invited anyone who donated $100 to nominate a topic on which I should write a post. Reader Daniela Brins-Norris has taken me up on the offer, and asked for a piece about the economic significance of Taylor Swift. Although this is a bit outside my usual set of topics, readers who know me well won’t be surprised to know that I have spent some time thinking about this and have strong (but weakly held) opinions.

I’ve been thinking about two questions. First, how did Swift become the cultural and economic phenomenon she is now? Second, what does her status as a self-made billionaire say about income distribution and public policy? I’ll write about the first today. If anyone would like to donate another $100, I’ll do the second.

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The Prime Minister of Spain, Pedro Sánchez, likes to invoke international law. Imagine that one day, someone had finally responded to him. Not just anyone, but one of the founding fathers of international law.

It happened just after the Ceuta incident, in July 2026, when tens of thousands people from Morocco surged into Ceuta, a tiny Spanish territory in Northern Africa. The incident caused diplomatic tensions with both Moroccan and European leaders. It was precisely the kind of case that Francisco de Vitoria (1483-1546) used to solve.

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… is set out over the fold. I’m confident readers who take a little time to think about it will realise it’s far superior to existing policy, and to any alternative proposed so far.

• Fourth repost since 2011

How Hegsethian heroes destroyed themselves and their entire civilisation

I haven’t yet seen the Odyssey film[1], but reviews mention a minor obsession of mine, the Late Bronze Age collapse and the ensuing Greek Dark Age. I first encountered this at the end of Ken McLeod’s Intrusion where the character Geena compares modern nihilists to the mysterious “city burners” responsible for the massive destruction of cities in the Eastern Mediterranean around 1200 BCE.

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