HIV up 200%, Malaria flaring up in Greece

Greece is borked, but because of the incompetence or malice of those at the ECB it is significantly more borked than it needs to be. It such a bad state are Greece’s finances because the ECB has sat idly by as it languishes in depression that they’ve cut major public health programmes leading to…

“Greece is an example of perhaps the worst case of austerity leading to public health disasters,” Mr. Stuckler explained in a telephone interview.

“After mosquito spraying programs were cut, we’ve seen a return of malaria, which the country has kept under control for the past four decades. New HIV infections have jumped more than 200 percent,” he noted.

Via. This is just an addendum to yesterday’s post trying to personalise it a little.

Filed under: Economics, Foreign Affairs, Politics, Society

Short on outrage? Hate nuclear power? Like immigrants? Left wing?

Sellafield, the country’s premier nuclear waste dump (where they in fact do a lot of hard work clearing up the dangerous legacy waste from seven decades of research, generation and weapons making) have a new megacontract out:

The £1.1bn Sellafield Infrastructure Strategic Alliance (ISA) was signed in December 2012 and awarded to a joint venture between engineering, design and consultancy firm Arup and construction and regeneration group Morgan Sindall. Delivery of the contract begins in May 2013…The main contractors in this case operate on the basis of three renewable five-year terms.

That’s some serious money. Justifying spending that must require a pretty nuanced communications strategy, eh, Sellafield spokesman Karl Connor?

“The chances are [a firm on a two-year short term contract will] come in and build it, using migrant workers, and then leave when it’s built.  However, if they have a 15 year contract to help us across a wide range of similar pieces of work, they would be more likely to set up an office locally and invest in training local apprentices.”

I’m being a little unfair to Karl, but only a little. I think it’s pretty reprehensible to use anti-migrant sentiment in this way. It’s a cheap shot even if Sellafield are intimately tied to the people living in West Cumbria. It’s also a bit fucking rich considering its a US/British/French consortia running the show at Sellafield.

Filed under: Economics, Migration, Society, migrants, Nuclear, Sellafield

The Nature of the Farm: Exploding pig shit

It isn’t often I get to write such a profane title which references Ronald Coase. Today is a good day for blogpost titles [1] and a bad day for farm workers. As with most factories with simple inputs and outputs pig farming scales very well. This means that they can get very big before they start seeing diseconomies of scale but once they do they’re pretty unique diseconomies of scale.

In a paper which makes me miss my Athens’ subscription, Alex Coads highlights that profit isn’t a very good predictor of firm growth. [3] In fact firm growth is a little random. But something which definitely prevents firm growth are diseconomies of scale.

Normally these refer to limits on staff monitoring, communication costs, duplications of effort and office politics. None of these are particularly relevant  for pig farms (pigs actually don’t collude, sadly for them), so they’ve just kept getting bigger and becoming more profitable to the point where they are discovering industry specific diseconomies of scale:

The problem is menacing: As manure breaks down, it emits toxic gases like hydrogen sulfide and flammable ones like methane, and trapping these noxious fumes under a layer of foam can lead to sudden, disastrous releases and even explosions. According to a 2012 report from the University of Minnesota, by September 2011, the foam had “caused about a half-dozen explosions in the upper Midwest…one explosion destroyed a barn on a farm in northern Iowa, killing 1,500 pigs and severely burning the worker involved.”

Apparently this just did not happen before 2009. Factory farming has helped us to feed the world. Intensively farmed pigs [2] have allowed for more protein to be produced at a great cost in terms of animal suffering and at little costs in terms of money. Negative externalities where they have existed have been more diffuse, like water pollution, such severe diseconomies of scale at the farm level are relatively new.

What we are seeing is a limit to farm size. There aren’t many firms that are limited in size by the quantity of waste produced, but it appears we’ve found one. I think it is safe to say Coase couldn’t have seen this one coming in 1937.

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[1] Is this the sort of post I should be writing if I want this job? I presume so.

[2] Writing this post makes me want Mario at Brindisa to cut me some Iberico jamon. From organically farmed, acorn fed pigs, that stuff though. And very expensive: Tesco value ham is £0.41/100g while Iberico jamon is more than ten times that, those prices tell a story.

[3] Do I really have to keep writing via Chris?

Filed under: Economics, Science, Society

Angelina Jolie is a Mensch

Kudos for her actions and for writing this.

MY MOTHER fought cancer for almost a decade and died at 56. She held out long enough to meet the first of her grandchildren and to hold them in her arms. But my other children will never have the chance to know her and experience how loving and gracious she was.

We often speak of “Mommy’s mommy,” and I find myself trying to explain the illness that took her away from us. They have asked if the same could happen to me. I have always told them not to worry, but the truth is I carry a “faulty” gene, BRCA1, which sharply increases my risk of developing breast cancer and ovarian cancer.

My doctors estimated that I had an 87 percent risk of breast cancer and a 50 percent risk of ovarian cancer, although the risk is different in the case of each woman.

Only a fraction of breast cancers result from an inherited gene mutation. Those with a defect in BRCA1 have a 65 percent risk of getting it, on average.

Once I knew that this was my reality, I decided to be proactive and to minimize the risk as much I could. I made a decision to have a preventive double mastectomy.

As everyone is saying, hopefully this will be taboo busting, raise awareness, lots more women will take mastectomies seriously as the correct medical intervention and an appropriate number of women will get screening as required. Won’t be enough because patriarchy. But it’s a tap, tap, tap that works against it.

Filed under: Society

A post about anything other than Thatcher 3: Limits to Coase

In the course of the day job I was speaking to someone in BA’s senior management. They were lamenting that Heathrow needs another runway, that everyone in the industry knows that Heathrow needs another runway, but that Heathrow was not going to get another runway because local opposition was too fierce.

“Why don’t you just bribe them” I asked, channelling Coase.

“We offer sound proofing of course, but its not enough,” came the despondent response.

“What about actually bribing them, you know, with money?” I asked a little incredulously.

I’d summarise the response as “splutter, gurgle, haha,” but it could have been bluer.

In real life, as loathe as I am to use the phrase, people don’t get bribed and people don’t bargain because doing so is weird.

Coase’s brilliant essay “The Problem of Social Cost” describes how mutually beneficial bargaining can help to eliminate the problems caused by externalities.

Imagine an airport which produces noise pollution. Now imagine that it has been built in a densely populated and wealthy part of the country. Seems fanciful I know, but bear with me. This airport wants to expand, and could expand very profitably, but locals, fearing an increase in noise and disruption don’t want it too.

The airport wants to produce an externality, noise. You can think of other people as owning a right not to be disturbed. To expand, the airport should compensate those who it will disturb. That’s only fair. You could have government tax and redistribute the airports profits but that’s messy and inefficient. There’s a simpler solution: bargain, split the profits, and everyone can be a winner. A cheque in the post every month for everyone in TW6.

In Coase’s world the limiting factor is transaction costs. Transaction costs are the costs of doing business, they include the cost of bargaining, of contracting, of working out who’s involved and many other things. Bargaining occurs when it is profitable so long as it is not too difficult to find the people involved and draft an agreement between all the parties involved. But this has not happened.

What’s interesting is that the failure to bargain has not happened in a way predicted by Coase.

The interested parties are well known and an extensive dialogue has been ongoing for some time. Legal settlements have already been reached. Transaction costs are low. But instead of offering locals a simple bribe, they  have been offered a more complicated solution involved sound proofing and vague promises of employment.

According to Coase this shouldn’t happen. Everyone involved has been working to increase transaction costs and has been moving further away from a settlement. A simple solution is right: there take the damn money! But people are leaving that money on the table.

The Overton Window is a concept which describes the range of ideas which are politically acceptable. Bribery has a long record of being clandestine and immoral and is well towards the unthinkable end of the Overton Window as far as policy is concerned. However, we can also think of a bribe as a payment for a service. In this case a bribe should be offered for the service of not raising legal or political complaints about noise. But people don’t like bribes, and that appears to be the end of that.

The Coase Theorem is a beautiful idea, but a great deal more prevents mutually beneficial exchange than transaction costs. The ideas which are fashionable will shape and distort the way people bargain and the deals people accept. It appears that Britain is a country uniquely adverse to bribery, at least if Tim Worstall can be believed. This might be a good thing overall, but it appears this aversion can also make us all poorer too.

Filed under: Economics, Society

*The Selfish Gene* er… I mean *The Selfish Toilet Seat*

To resolve an argument there’s nothing quite like Google Scholar. Should toilet seats be left up or down?

First of all a disclaimer. It might be too expensive to move from our current toilet seat norm to a different one. Expensive I mean in terms transition costs, maybe the social anxiety and anti-social behaviour required to move us would be more awful than the small benefits we gain from moving from one norm to the other. Even if that’s true, these are still interesting, and vital, matters to discuss.

What the women are dreading, and the men [1] are hoping for is that I’m going to say toilet seats should be left up, not down. I am not. Lots of people would like to argue that the toilet seat being one way or the other is inherently better, more hygienic or sightly but those arguments are destined to be weak. If Dr. J. Evans Pritchard can’t tell the worth of a poem toilet seats are beyond us all.

There are two things to bear in mind while norm choosing. First is the inconvenience of leaving the toilet seat other than you’d like to find it and the other is the inconvenience of finding the toilet seat other than you’d like to find it. Compared to NGDP growth shortfalls this is all unimportant, but we’re lucky enough to live in an age when we’re allowed to care about the unimportant, embrace it.

I think visually, and the below graph helped clear up my thinking on the subject, taken from the above linked paper by Jay Pil Choi.

If everyone is a woman then seat down is clearly optimal. If everyone is a man then seat up is clearly optimal. That is if we assume the inconvenience of putting up and down a toilet seat is roughly equal. A reasonable assumption, although feel free to register your complaints in the comments.

First of all, a woman having used a toilet is predictive of another woman using that toilet next. Either because the same woman will come back or because the presence of one woman is indicative of there being other women in the vicinity or using that facility in particular.

The more important and logical strand of argument is different though, when society operates under a seat up or seat down rule one set of people  must incur the inconvenience of using the seat on every (for women) or almost every (for men) occasion. The other group incurs no toilet seat related inconvenience.

Because of these two interrelated  the socially optimal arrangement is for you to leave the toilet seat alone. This is what the above graph shows. Only under circumstances of extreme asymmetry in terms of inconvenience does it become important whether the seat is left on way or the other.

This finding is trivial, but also profound.

First of all because it shows that being selfish is good. The world is a better place because of selfishness as selfishness. Adam Smith argued that the selfish interest of the butcher and baker helped provide us with a service, when it comes to toilet seats there are direct positive externalities from selfishness.

Secondly, the results are generalisable. More things in life are like toilet seats than you realise. [3] When sharing a car, leaving it as you want it is superior to always returning it to someone else’s preference, or to somewhere neutral.

A society which is more selfish, and more accepting of bring selfish, does not therefore represent a move towards barbarism, but represents a sort of progress. Thing of that next time you’re on the toilet. In fact, some of you may be there right now reading this on your phone. Take my advice. Leave the seat alone and go and do something you enjoy.

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[1] Yep, just thought, “that’s very cissexist of you”, but sod it, I’m talking about toilet seats. [2]

[2] What do you mean you come here for serious political analysis? You really haven’t been paying attention these last four years.

[3] Can I submit that as one of the best sentences ever?

Filed under: Blogging, Economics, Society

Back of the fag packet macro plan that solves all society’s problems

Partially for Frances Coppola, partly as a reference to myself – my ideal big-picture policy regime.

At the moment monetary policy is meant to be conducted so that inflation is 2% in the medium term. The target is hit mechanically by moving interest rates, although interest rates serve more as a signal of the future path of monetary policy than a binding constraint in themselves. Also people are poor. And immigrants get a raw deal.

I think all those things are stupid.

A much better policy would make things clearer (that monetary policy involves creating more money, not moving interest rates) and combine with my other favourite policies in such a way that they all reinforce one another.

So first things first, monetary policy’s aim should be to hit a 5% level target for per capita nominal gdp. Actually, it should probably be a 5% level target for per capita nominal wages as they’re the price we’re most worried about. We don’t want nominal rigidities forcing people out of work, I don’t much care if nominal rigidities create a glut of girders, just people.

What policy should be used to hit this? A Citizen’s Basic Income. First of all, a CBI is a policy in which every citizen gets a basic income regardless of anything which is enough to subsist on. You remove housing benefit, unemployment cover, in work benefits and just pay everyone the same. If you’re worried about kids give everyone a lump sum payment on birth. If you’re worried about the longterm disabled cover that via healthcare. Benefits are thus extremely simplified.

This is where the clever bit comes in (which I think I stole from interfluidity), this CBI is topped up via the central bank. All currency creation is done via direct payments which top up this CBI. This means in times of financial stress etc. when nominal growth is in danger of causing unemployment etc. everyone gets a payment. In boom time this top-up CBI is scaled back. This clarifies what the bank does (prints money) and creates incentivises to support loose policy in bad times which lesson in good times.

Finally, an open borders migration policy, but migrants only get signed up to the CBI scheme after ten years. This creates an interesting incentive for citizens. Because money only enters the system via direct payments to citizens and the central bank is targeting a per capita (resident, not citizen) nominal target an increase in immigration causes an increase in payments to citizens. The policy pays off the local population automatically with a share of the increase in wealth caused by immigration. Because the deal looks pretty good to migrants (10 years ain’t so long) they don’t disrupt the equilibrium.

There we go. All my favourite ideas in one place, all reinforcing one another. What does everyone think?

Filed under: Economics, Politics, Society

War is a very particular accounting issue

For me, like Chris, [going to war] is an accounting issue.

Thus sprach Paul. But I think that’s an ugly, confusing way of phrasing it. In retrospect perhaps you can decide whether a war was a good idea with a quick tally ex-ante and ex-post death tolls with some role for economic performance, but a forward looking evaluation is very different.

My priors suggest strongly that killing people is very wrong. My priors are very strongly biased in that direction. Call it a personality flaw! I think you’d have a tough job convincing me that killing one person was worth probably saving a hundred.

Thinking about war as something likely to be fucking terrible and which definitely has incredibly high costs and definitely has incredibly uncertain benefits is useful. It sets the bar for war incredibly high. No particular policy position needs be behind the war or your opposition, I am just talking about stacking the deck.

Stacking the deck gets a bad name, but stacking the deck against killing people is a self-evidently pretty good idea. War is one subject where I think the principle “first, do no harm” is a good one.

Why? Because history. The historical record says that some truly awful actions can lead to prosperity but that truly awful wars normally just lead to death and suffering. So, for example, my priors tell me to somewhat support what’s happening in coastal China, but not what happened in Iraq. I’ll do the same in the future too.

Filed under: Foreign Affairs, History, Society

‘Adam and Steve’?! This almost makes me regret my psydonymity

David Simpson MP announced during the debate on equal marriage ‘it’s Adam and Eve, not Adam and Steve.’ Confirming once and for all that being clinically braindead is no barrier to high office. O welcome to the land of opportunity.

Of course, This is a man know for his support of homeopathy, so it will come as no surprise the fucking idiot got the line wrong the first time round and said ‘it’s Adam and Steve…err…Eve not Adam and Steve.’

It’s moments like this I want to announce loudly and clearly, and for it to be indelibly recorded in my real name, ‘I am a citizen, an englishman and i say this man is a fucking idiot, and he does not represent me.’ But I won’t. Keep guessing.

Filed under: Politics, Society

Nuclear Power can save us from climate change

I think the left and environmentalists need to embrace nuclear power. There are plans for EDF and British Gas to build four reactors, and it is likely that those would be the first of many; Hitachi, GDF Suez and Iberdrola are all interested in building new nuclear in the UK.

Why new nuclear? Well, I was initially a reluctant supporter, but when it comes to large scale, uninterrupted base load generation it is hard to beat nuclear. Plus, no carbon. Not none really, building things emits carbon, but near enough for it to be properly counted as a renewable fuel.

EDF have just announced they are planning on running their existing UK nuclear fleet for another 34 years (that’s across three plants, Hinkley Point, Hunterston and Sizewell). Increasing their life like this will do enough to reduce carbon emissions equivalent to removing all the cars from UK roads for nearly five years. It is about 340 million tonnes of carbon that won’t be emitted. That is just from running longer our existing plants – that’s a big plus for the planet and for people.

But, there are huge problems with nuclear power in Europe.

First of all, Sellafield, it is a mess. Honestly, it is even worse than you imagine. Look it up, the National Audit Office have a report and Wikipedia have some background. Building 30 sounds pretty fucked up especially. And I’ve heard some odd things about the Seagulls that live there – huge they are. However, we are better at dealing with waste now and things are today built so that it is easy to take them apart safely.

That brings us to building, which is the real problem. No Europeans have built Nuclear Power Plants to budget for years. France and Finland have both fucked up colossally. Like three times above cost and behind schedule. Ludicrously badly. However, despite this, all is not lost. The Japanese and Chinese have built ahead of schedule. They don’t have special Asian-aptitude powers, anybody can do it if the corrupt, incompetent, unproductive Chinese can.

So to the problems of nuclear, I would say that they are in the past or that they can be overcome. The promise of nuclear energy is in predictable energy and tons of it with tons of carbon. I think it is the best bet for decarbonising the economy and I think serious environmentalists need to get behind it.

Filed under: Politics, Science, Society, Climate Change, Flamanville, Hinkley Point, Hunterston, Nuclear, Olkiluoto, Sizewell

We think torturing people isn’t too bad, but please, no vaginas.

Just after I hear some priest thinks torture ain’t such a big deal, they vote to reaffirm that women shouldn’t be allowed to be Bishops. Yey for Jesus! Honestly, they make atheism so easy these days.

When Voltaire said that if God didn’t exist we’d need to invent him, I don’t think he meant as comic relief.

Filed under: Society

Young Earth Creationism: I can’t believe some people believe this crap

Via Krugthulu, Marco Rubio’s isn’t sure how old the planet is:

GQ: How old do you think the Earth is?

Marco Rubio: I’m not a scientist, man. I can tell you what recorded history says, I can tell you what the Bible says, but I think that’s a dispute amongst theologians and I think it has nothing to do with the gross domestic product or economic growth of the United States. I think the age of the universe has zero to do with how our economy is going to grow. I’m not a scientist. I don’t think I’m qualified to answer a question like that. At the end of the day, I think there are multiple theories out there on how the universe was created and I think this is a country where people should have the opportunity to teach them all. I think parents should be able to teach their kids what their faith says, what science says. Whether the Earth was created in 7 days, or 7 actual eras, I’m not sure we’ll ever be able to answer that. It’s one of the great mysteries.

At one level, this shows the Republican’s anti-science at its worse. The Christian right doesn’t see science as a path to knowledge, merely as another hermetic cult with its own competing creation myths. This is the key to why this young eartherism is a problem.

On another level, it shows the chutzpah of the Republicans. Of course being scientifically illiterate has an impact on the economy! The economy is more or less science in action, or at least the application of things that haven’t failed yet, which is more or less what science is.

This should be worrying for everyone involved (which sadly is everyone) because we’re already 13 days into the 2016 campaign, and this guy is in the front of the Republican pack.

Filed under: Politics, Society, Krugman, Marco Rubio

What would Jesus do?

Priest thinks gay marriage is bad but that torture isn’t a big deal. Also doesn’t like human rights legislations generally. Yey, feel the compassion!

Filed under: Society

Pro-life, pro-death, pro-poverty

“This is a Catholic country” doesn’t seem like a good reason to kill someone, but then if you’re pro-life perhaps you will disagree.

Savita Halappanavar (31), a dentist, presented with back pain at the hospital on October 21st, was found to be miscarrying, and died of septicaemia a week later.

Her husband, Praveen Halappanavar… asked for a medical termination.

This was refused, he says, because the foetal heartbeat was still present and they were told, “this is a Catholic country”.

She spent a further 2½ days “in agony” until the foetal heartbeat stopped.

In perhaps related news that pro-life people are only pro-life until you are born:

Researchers from the University of California, San Francisco launched a Global Turnaway Study this year to explore the potential social and economic implications of denying women access to legal abortion. And after documenting the experiences of the women who seek to terminate a pregnancy but are turned away from abortion services, the UCSF researchers found that those women were three times more likely than the women who successfully obtained abortions to fall below the poverty line within the subsequent two years.

Perhaps I’m being unfair about the pro-life movement, but I doubt it. If this sort of thing worries you that is good. The pro-life movement are adopting tactic used in the US to intimidate people, for example protesting outside abortion clinics. Their success would mean the exportation of this suffering. The stakes are high, be worried.

(Via, and via, and others too)

Filed under: Politics, Society, Abortion, Pro-life, Savita Halappanavar

When Amazon own everything

A couple of days a go, my friend Linn sent me an e-mail, being very frustrated: Amazon just closed her account and wiped her Kindle. Without notice. Without explanation. This is DRM at it’s worst. 

I cannot verify whether the e-mail exchange actually happened or whether both parties are being honest, but it is instructive of the trouble with digitally “owning” something.

In digital form, in extremis, you own very little of what you think you own. A lot of the time you are merely leasing the material. So long as nothing goes wrong, and so long as you stay onside with the usually unburdensome terms and conditions nobody will notice.

For example, most music, films and books bought online are in fact leased. You have full use rights of the material you purchase but you don’t own it, and your use rights can be revoked if you transgress the terms and conditions nobody reads.

Most people don’t know this, and this is why people don’t mind. However, as seen at the link at the top of this page, when you break, or are thought to have broken, the terms and conditions of the lease it can be cancelled and all the content you thought you owned will vanish.

This points to one reason people pirate material. Pirated material is material you own, unlike most of that provided commercially. Paradoxically, it is in the real world that ownership allows anonymity. In reality, we are all very traceable on the internet. Each click or digital transaction involves electronic data passing between two known, verifiable and unique IP addresses.

When you buy something in a shop in the real world you usually don’t know where the other guy lives, but on the internet you know just where their computer “lives.” That means if you annoy the person from which you bought a game, song, book or movie they can slip in and silently take what you bought.

The internet and tech sector is growing much more quickly than the rest of the economy. That means that digital goods are becoming a bigger part of what we own and these problems are multiplying. As the digital world expands more and more of the valuable things you own could end up being leased and power will pass from the state and from individuals to private companies.

Kinda creepy when you think about it.

Filed under: Economics, Society, Amazon, Internet, Ownership

How’s this for bad incentives?

Six Italian scientists and an ex-government official have been sentenced to six years in prison over the 2009 deadly earthquake in L’Aquila… The seven – all members of the National Commission for the Forecast and Prevention of Major Risks – were accused of having provided “inexact, incomplete and contradictory” information about the danger of the tremors felt ahead of 6 April 2009 quake, Italian media report.

The Italian scientists who said “there probably won’t be a big earthquake” before a big earthquake are going to be sent to prison. This is because in this region of Italy, a small tremor isn’t normally a warning sign of a larger quake, it is just a small tremor, nothing more, nothing less. They said this, and now face jail.

The problem with this should be obvious, the incidence of predicted earthquakes that never happen will now go up. This won’t make anybody safer, in fact, evacuations are dangerous, so this will make the world a more dangerous place not to mention ruining the lives of seven innocent men.

 

Filed under: Foreign Affairs, Society, Earthquake, L'Aquila, Science

Environmentalists are conservatives

The psychologist and political theorist Jonathan Haidt declared that what separated the right and left aren’t at separate ends of a spectrum. In reality morality is divided into five main categories of moral concern — harm, fairness, loyalty, authority and purity.

The left care a lot about harm and fairness but not much about loyalty, authority and purity. The right care about all five values about equally. While the environmentalists usually line up with the left on most matters there is a striking difference between the left and environmentalists.

Environmentalists care about purity. One of the things that derives environmental politics isn’t just a concern for the natural world for its own sake, but a feeling that it is should not be interfered with, that it should be kept pure. It is this adherence to purity that makes environmentalists and economists get along so poorly.

Conservatives care about human purity too, one of the reasons they hate the gays (or hated, much of the right has come a long way), is because they violated particular ideals of  masculinity. That and bum sex is icky. Environmentalists have a similar views on nature, there are ways nature should be and then there are ways mankind perverts it.

I began thinking and this in this way after reading Tim highlighting Mike Moffat‘s troubles with environmentalists in Canada. From Mike’s takedown of David Suzuki:

“But if you ask the economists, in that equation where do you put the ozone layer? Where do you put the deep underground aquifers of fossil water? Where do you put topsoil or biodiversity? Their answer is ‘oh, those are externalities’. Well then you might as well be on Mars, that economy is not based in anything like the real world,” Dr. Suzuki goes on to say. Dr. Suzuki’s remarks on externalities were clarified in an interview given to the magazine Common Ground: “I won’t go into a long critique, but currently nature and nature’s services – cleansing, filtering water, creating the atmosphere, taking carbon out of the air, putting oxygen back in, preventing erosion, pollinating flowering plants – perform dozens of services to keep the planet happening. But economists call this an ‘externality.’ What that means is “We don’t give a shit.” It’s not economic. Because they’re so impressed with humans, human productivity and human creativity is at the heart of this economic system. Well, you can’t have an economy if you don’t have nature and nature’s services, but economics ignores that. And that’s an unbelievably egregious error.”

Anybody who knows anything about economics as practised in ivory towers or government knows that this is nonsense. An externality isn’t something which economists ignore. It is something which those economists study will ignore until they are made to pay attention. A factory owner will ignore his pollution’s effect on those downstream because he receives the benefits from cheap waste disposal but none of the costs. This can be dealt with through negotiation, if those downstream have property rights over their water. It can be dealt with through regulation, if coordinating those affected proves to difficult without a state. Economists don’t just ignore it.

In fact, economists have for years been deeply concerned with coming up with ways of dealing with externalities. Pigou was worried about rabbits, Coase was worried about pollution, one of the paper’s that got Paul Krugman his Nobel prize wouldn’t have been possible without the concept of “positive” externalities. That’s over 30,000 citations from three works from three of the most well known economists in the world. This isn’t marginal stuff.

So why would an environmentalist ignore such a canonical part of the economic literature? I would say it is because they share with conservatives a respect for purity which economists and I do not share. Whereas an economist sees a problem of balancing benefits and costs, an environmentalist sees a problem of protecting something from contamination. This implies a different balance of benefits and costs. It implies a steep cost curve going down but only a gradual one going up. Easy to go there, hard to come back.

This means that while economists think they can ameliorate things by changing prices, environmentalists are more worried. Pricing externalities so that those who cause them pay the costs (or receive the benefits) seems like all too little effort for protecting nature’s purity. This means that environmentalists misinterpret economist’s offers of help as capitulation. And economists misinterpret environmentalists’ failure to campaign for the right things as ignorance.

I’ve sketched out a caricature of an environmentalist for this post (likewise a caricature of economists), but I think it gets to a fundamental problem that bedevils environmental policy making. A lot of the policies that would help achieve environmentalists immediate aims are not compatible with their high level aims of maintaining nature’s purity. For example, carbon prices and nuclear power could help eliminate carbon fuels, but environmentalists are uninterested because carbon pricing is too weedy an instrument and nuclear too powerful a technology. Likewise, fisheries are being ravaged because it is very difficult to privatise the seas to encourage careful husbandry and environmentalists see privatising the seas as despoiling their purity.

It is a tragedy of miscommunication, and not one to which I think there is an answer. Sensible policies only get enacted once we know what they are and there is a coalition able and willing to force it through. We know the answer to many environmental questions, and we have a movement able to force those policies into practice, but the will is lacking.

Filed under: Blogging, Economics, Society, David Suzuki, Environmentalists, Jonathan Haidt, Mike Moffat, Tim Worstall

So. Much. Stupid. Conservative blind spots edition

Alex Tabarrok

Hey, black dudes! Its great having a big willy! Why you get so mad?! Us white guys are complimenting you!

Okay, that’s not what he said. But he did say this of Asians:

Alex Tabarrok

Hive mind is not even an insult it’s a compliment – like wisdom of the crowds. The hive mind diffuses knowledge and cooperates–it’s not all thinking alike it’s all using the best of each.

Perhaps I better back up a little and give all this a little context.

Noah Smith wrote a post saying that an academic paper  on A Garett Jones paper called “National IQ and National Productivity: The Hive Mind Across Asia“. When I hear about IQ and economic development I reach for my pistol. Noah Smith is just as sceptical. Personally, I don’t see the mechanism. As Chris Dillow says, there are models and mechanisms. You can come up with a pretty model and then become angry when the world deviates from it or you can think about how your pet theory would work its way through the real world.

I can understand a mechanism that uses slight changes in IQ to predict which “nation” will develop first. I’ll describe the one I have in my mind. There are thousands of institutional forms –  ”rules of the game” – and only a few of them are compatible with economic growth and prosperity. A higher IQ gives a group 1) a wider the selection of institutional forms to choose between 2) those institutional forms will on average be more complicated 3) better institutions are more likely to be chosen 4) once successful institutions are identified a more intelligent group will be more likely to keep them.

That is an interesting model, but it doesn’t seem to bare any resemblance to the history of the world. The more accurate picture is that various interest groups fought it out in various different places until, in north western Europe a powerful merchant group came into the ascendency and won political concessions that secured their property rights. This happened to have happened after the political revolution following black death in which western European peasants won a degree of autonomy and near some coal. That combination of secure private property, freeish though expensive labour and cheap energy happened to produce sustained economic growth. Nobody planned it because they were smart. It wasn’t sustained because it was smart by the best of my knowledge either. Because Europe was the most violent place in the world, everyone had to strive towards economic growth or face political annihilation. So greed, luck and violence seem far more important to the first sustained initiation of economic growth than IQ.

Similarly, why are some nations wealthy now and some not? Well there is again a similar model where clever nations adopt good institutions and stupid ones don’t, merely out of ignorance, but that doesn’t seem to be the mechanism we observe. Very poor places had their institutions fucked up by white people – psst, that’s Africa, Latin America, China, India etc. – and it takes a long time to get it together after an occupation and negative structural shock. National IQ sounds racist, and while I concede it might have some predictive power with regard to who’s developed, it doesn’t accord with most of the other mechanisms we have for where economic growth comes from – so I’m fairly happy to dismiss it.

So it is into this milieu we jump.

Noah argues that the paper discussed, by Garett Jones, uses lots of racist tropes and should handled with care. He provides some evidence contrary to the predictions of the paper of varying degrees of convincingness. Scott Sumner, whom I respect greatly, hits back that there is a great deal of explanatory power in culture and that Noah shouldn’t throw around the word racist because it is a bad thing. The only problem is that nobody was talking about culture, they were talking about racially innate IQs, and their explanatory power with regards to economic growth. And that brings us to Alex Tabarrok’s comment, at the top of this post and left underneath Scott’s saying how a “hive mind” is a good thing.

This gets to the heart of the real problem.

For some reason, those on the left can see the context in which things happen in a way those on the right cannot. Noah isn’t too left wing, but he seems to have this special power (and attribute of the left wing hive mind, no doubt).

Because for conservatives it often seems context means nothing. I mean seriously; when, in any cultural artefact ever created, any film, novel, piece of art, daydream or utopian novel has a “hive mind” been presented in a positive light? From Zamyatin’s We, to Huxley’s Brave New World a hive mind is not presented as something good. The hive mind does not refer to the wisdom of crowds.

Lets go back to black people, because its easier to talk about racism against blacks. What has been one of the most persistent racist tropes about black people? That they are sexually promiscuous, even sexually aggressive. This is why white people going on about black guys large cocks is usually racist in content, and often racist in its implications. For a female example, the Hottentot Venus wasn’t exhibited for Londoners to gawp at just because white people were/are racist, but because they were/are racist in particular ways. The ways in which people are racist must colour the way in which we view statements.

Context matters. Asians have been stereotyped as sneaky, corrupt, uniform, “hive mind” automatons for over a  century. You still see it in most western reports of strikes and social unrest in China – shocked, shocked reporters that Chinese people are rebelling against their bosses or bureaucrats. Jamie covers Mass Gathering Incidents frequently and there is a good article length treatment of labour unrest here. Hive mind? Tell that to Foxconn. Considering a racist slur in context is not hard, it takes effort in fact to abstract away from the negative connotations of most racist slurs, yet conservatives do so all too often.

This is sometime around the 1970s conservatives realised they were losing the fight for intolerance, so they changed tactics and tried to reframe the debate. They were no longer arguing in favour of racism, oh no, they were arguing against over earnest antiracism. This was politically convenient for two main reasons.  One, lots of the ground work of antiracism was carried out by those on the left. Two, it gave racists someone to vote for. Now in the UK Labour had an at best mixed record on race, especially with regard to housing policy, but during the 1980s they were much more focussed on antiracism. During the same period conservatives began to create a victim mentality where attacking antiracism became more important than attacking racism.

Alex Tabbarrok might like the idea of being part of a hive mind. And some white men might like the idea of being sexually promiscuous with a mighty, large penis. But to completely ignore over a century of casual and institutional racism is plain stupid. But it is a pattern conservatives find themselves slipping into too often: attacking antiracism more virulently than racism. This post is less than completely satisfactory, but I’ll leave it there, and pick up in the comments if necessary.

Filed under: Economics, History, Politics, Society, Alex Tabarrok, Chris Dillow, Garett Jones, Hottentot Venus, IQ, NIE, Noah Smith, Racism, Scott Sumner

A metrosexual olympics

Has this been the most weepy Olympics of all time? Or have I just not noticed it before?

Not a criticism just wondering.

Filed under: Society

Not bad

That’ll do pig, that’ll do.

Filed under: Blogging, Society