Wednesday, May 30, 2007
I was thankful this summer for the release of the movie "Blood Diamond", hoping that it would reveal the true human costs of the diamond trade. But alas, it seems to have had no lasting impacts on the public conscience. It seems that Hollywood is only expected to produce non-fictions, and movies any semblance of truth or fact in movies are dismissed by the public as not having any possibility of being so. Regardless, the diamond trade continues to brutally harsh. Maybe if a little disclaimer were placed next to the price tag: "(number) of poverty-stricken people were killed or injured in the production of this overpriced symbol of opulence. (number) of people were also displaced from their homes and (number) of families were broken up. Lives are transitory, but diamonds are forever."
Tuesday, May 29, 2007
The movement towards a peaceful world is necessarily slow, and the path is ridden with obstacles. But there is a great wall that stands near the end of this path. If peace is to come, this wall must be abolished. It is the wall that stands between the rich and the poor, the can do's and the can't do's, the economic north and the economic south. It is the wall of prosperity, and unfortunately in this world some people cannot traverse this wall. For many, the wall is too high, and they are too short. They cannot afford the ladders or ropes to climb over it. They also do not hold the means or abilities to destroy this wall. This is up to the rich, the can do's, the economic north. They have the means and abilities. There can't be real justice without economic justice. People will be hungry as long as they can't feed themselves. They will be poor as long as the north consumes without abandon. They will perish as long as they are perceived to be less-than-human. Our nation is founded on the ideas of freedom. The economic south is not free. But to rule over them, to absorb their resources, and to exploit their poverty to the profit of the north will never make them free.
Saturday, May 26, 2007
"What is true is that there is most definitely still is a 'mainstream' set of assumptions that are somewhat difficult to challenge and which translate into economists are conditioned as to 'what to think'. Try for instance to present a seminar where agents in your model have and exercise any form of market power and you will be immediately and repeatedly challenged (as the Card discussion above suggests). Economic rents are just not supposed to survive, and your audience will grill you until you surrender (if not in this seminar, in the next paper you choose to write).
But present the same seminar and begin with a likely even more improbable statement such as 'I will assume free entry, competition and zero profits in every sector' and it will probably slide by without challenge."
One could continue to question why the heretical challenges brought up by heterodox economists are quickly dismissed, while obvious impossibilities (boundless rationality) can be so easily accepted.
Monday, May 21, 2007
Why then, if we all have these altruistic tendencies hard-wired into our basic neurological make-up, why isn't the whole world holding hands around a camp fire singing "Kumbaya"? Studies show that external factors - social, political, and religious - can override the fundamental empathic tendencies of humans. That is, we can be trained or manipulated to refute our natural behavioral inclinations.
One line, while really insignificant in the context of the articles purpose, really struck me: "We know from neuroscientific empathy experiments that the same affective brain circuits are automatically mobilized upon feeling one’s own pain and the pain of others". I find the fact that the same exact part of the brain is stimulated in cases or both personal pain and in the case of being conscious of the pain of others is very interesting, and speaks about the natural response to suffering - that no matter who may be suffering it, it really affects us all the same. This means that there must be very intense belief systems that overwhelm the natural empathetic feelings towards others.
A huge conclusion that may be drawn from these studies is that "the insidiously effective scapegoating of human nature that claims we are motivated by greedy, dog-eat-dog “individual self-interest is all” is undermined. Stripped of yet another rationalization for empire, predatory behavior on behalf of the capitalist mode of production becomes ever more transparent". If we all have this basic, underlying drive towards altruism or compassion, then any sort of avaricious nature must be a product of the system which we currently interact in. This, of course, assumes that there is another similar yet opposite drive for self-interest or self-preservation that is neurologically fundamental and always acts in opposition to the empathic drive. It is very possible that these conflicting drives exist as products of evolution and at times cooperate or act in harmony, but at other times act in dissonance. Either way, psychological studies are having an increased impact on economic studies, to which I say, "It's about time!"
Developing countries seem to have obstacles in every possible sector that stand in the way of further growth. Despite the numerous problems they face, many people (economists, but the general population as well) focus on only a few issues, such as health, education, lack of free markets, and especially poor/corrupt governments. To focus solely on one issue, or even only 2 or 3 of these issues, misses the big picture. Development can't be pursued one sector at a time. It is trying to build a house of cards vertically instead of horizontally. When your building it, you lay down one level, then you slowly move up one level when the foundation is secure and complete. If you tried to build off a weak or incomplete foundation, the whole house will likely fall.
Sunday, May 20, 2007
Only 47% of the pre-Katrina public transportation routes are open, and only 17% of the buses are operating.
This is for a city where over 25% of the population heavily relied on public transportation to get to work.
Only 45% of the schools in New Orleans Parish have been reopened. Only 52% of the hospitals have been reopened.
Another figure which at first glance might not seem very significant, but I think has serious implications is the percentage of child-care centers that have been reopened. In New Orleans Parish, only 33% have been reopened. For families with a single parent or families where both parents work (not to generalize, but let's assume these would be mostly poorer families) this gives little incentive to move back. Private child care can be expensive, so many people rely on these centers to take care of their kids when they go to work. I've read articles about the shortage of low-skilled workers that has plagued the area since the rebuilding process began, which is partly because a lot of these workers moved to the construction sector which was offering high wages due to the increased demand. But I think another reason is that the rebuilding process hasn't made it a priority to build in a way that would give the lower class incentive to move back. If they lack schools, hospitals, public transportation, and child care services, it would be very hard for a family which needs all those things to feel any sort of desire to return. Why come back when you may be guaranteed all these amenities wherever you may have moved to. No matter how strong your desire to move "home" may be, if home can't provide the basic living essentials, you may be forced to stay away.
New Orleans still has a lot of problems that it must face in the near future - many more problems than most people think. It's been almost 2 years since Katrina hit, but if you travel through the lower ninth ward, you may feel like it's only been two months.
I've been reading up on Catholic Social Teaching. It's a part of Catholic ideology that they don't really teach you in Sunday school (maybe because it talks about the value of all human beings or the fact that it advocates solidarity among workers, etc). I'm no longer Catholic, but I still find the basic ideas fascinating, and the fact that after being Catholic for 18 years I never once heard any of the ideas of Catholic Social Teaching is even more astounding. The quote I posted is from a Papal Encyclical called Laborem Exercens by Pope John Paul II. You can find it on the Vatican website.
Saturday, May 19, 2007
Pros and Cons of the Top 20 Democratic Presidential Candidates
Pro: Size; power; ability to emit short-range optic blasts.
Con: Potential attack ad: "Sometimes Optimus Prime is a robot, other times a truck. Which is it, Mr. Prime? America deserves a leader that doesn't transform whenever it's convenient."
Pro: Knowledgeable about global health issues; everyone seems to like him; Joshua Tree album.
Con: Too busy hugging everyone to actually execute the duties of office; no one likes the sound of "Vice President the Edge" or "Secretary of Health and Human Services Larry Mullen Jr."; the whole "Zoo TV" thing.
Pro: Could draw some initial interest from the Christian right until they research his actual positions in a deeper way; likable; strong leadership qualities.
Con: Unkempt; pretty far left; messianic complex.
Just think how much we could cut out of our defense budget with Optimus Prime as President. No terrorists would even think about attacking us...
Jesus could help with environment problems...if he could change that whole water into wine thing to water into...clean water.
No comment on Bono.
Is it....GDP? YES! Especially if you live in the third world, and every development strategy that has been forced upon your poor country has been solely focused on the unceasing growth of this meaningless figure. When the majority of your economy is agrarian, barter-based, or completely informal, what does the value of all "final goods and services produced in a country within a certain time period" (in the words of Mankiw) matter? With no real relevance to quality of life, the fanatic pursuit of GDP growth has led to negative growth in many countries, while those who have succeeded in increasing their GDP see little of the newly created wealth distributed to those who need it the most (and who probably do most of the work). Instead of launching a preemptive war in Iraq, we should have launched a preemptive war on stupid social welfare measurements. It probably would have cost less then a trillion dollars, and it probably would have resulted in a lot more good (and a better political word image). breathe
What really got me going on this topic was reading a post about China and how their country has grown at a fantastic pace (using GDP measurements). What many China-fearers forget is that the majority of the country still lives in abject poverty and have seen no real improvements in quality of life in the last 20 years (unless toxic rivers and polluted air count as improvements).
But as I pondered this, another thought came to mind. Is this abundance of food options a direct cause of Americas problems with obesity? If people were stuck with hot dogs and hamburgers all day, every day, they would quickly get bored, possibly creating alternatives but also possibly eating less. With all the different food choices that are presented to us due to the motley population of America, we may be induced to eat more of it. More options could perhaps lead to more consumption. I wonder if the guys at Freakanomics have thoughts about this...
Friday, May 18, 2007
"As Americans, we believe in forgiving and forgetting, and are terrible at understanding how history affects us today. We are arrogant in not recognizing that when we benefit, someone else may suffer. That will lead to resentment and anger, and if suppressed, will boil over one day"
"At some point we have to accept the reality that playing big brother to the world -- and yes, sometimes acting as a bully by wrongly asserting our military might -- means that Americans alive at the time may not feel the effects of our foreign policy, but their innocent children will"
Hmm...he might be on to something here. I never thought that our actions (murder, occupation, exploitation) could come back and actually work against us. Maybe they really don't "hate our freedom". Maybe they have a legitimate reason for being angry (though in no way justifying horrendous attacks on innocent people).
If you couldn't tell I'm being a bit sarcastic here.
Sometimes I feel like I'm the only one (not really, but I feel like I'm amongst the minority) who sees through all the fear-inducing rhetoric or flat out propaganda that ceaselessly dehumanizes Middle Eastern people. If anything, many Middle Easterners probably yearn for freedom more than Americans, since we have come to take our basic freedoms for granted. Don't forget that freedom (in a political sense) is different (but not necessarily better or worse) in different places. I would like to point out that the Koran has supported the right for women to vote since the inception, and many Middle Eastern countries have had women presidents or prime ministers. Now, I know they have many issues with womens rights and equality, but look how long it took the United States to allow women to vote, and we have not yet had a women president.
Thursday, May 17, 2007
Cait Murphy thinks that discussion of global warming is overblown? She points out the real problem with the global warming debate and doesn't even realize it! People really don't take it seriously. I can drive 10 minutes from my house to the beach and the shoreline will look exactly like it did yesterday. "And they say the oceans are rising...pshhh" is what many would think. This is an unfortunate consequence of the gradual manifestation of the effects of global warming. We don't see penguins lying dead in our streets or New York being consumed by the Atlantic Ocean, so it is easy for us to casually ignore the warnings. We may not believe that New York city will be underwater in less than 50 years, even though we maybe should. Then we should ask "why don't we believe that" and from there we ask "what steps should we take to inform people of the real gravity of the situation". If we wait until the real effects of global warming are knocking on our front door, it might be to late to stop it.
"The individual level — where change seems well underway, but probably won’t amount to all that much without major institutional/structural changes."
I agree completely that without major institutional or structural changes, individuals won't affect any long lasting change in the global climate, but this is just as true for the other two levels. Without major structural changes with complicity from all three levels, there will be no sustainable movement towards lowering greenhouse emissions or curbing global warming.
Institutional and structural changes usually arise from the collective actions of individuals, not the governments or corporations who have vested interests in the current systemic structure, or else that structure wouldn't exist in the first place. It is the role of individual consumers to bring about social change, and I see that occurring as individuals become more environmentally and socially conscious. Unfortunately, this is a slow process, and the idea of global warming is still relatively new. Any alteration of consumption patters takes time to become widely accepted.
Individual change and institutional/social change go hand in hand. Do not underestimate the power of the common man to have a considerable affect on global warming. It was the collective actions of individuals who caused this mess, and it is surely within the power of individuals to fix it.
"Perhaps the crucial question is whether unequal countries grow faster.
If they do, might a bigger cake, with unevenly divided slices, be better for the poor than a tiny cake cut into equal but tiny pieces?
After all, the most conspicuously successful economy of our times is that of the relatively unequal United States."
Now, I think it is debatable whether unequal countries grow faster than equal ones. The debate is really futile though, since equality is just one factor that contributes to a countries (sustainable) growth. I believe either could contribute to growth in the short run, depending on other existing factors such as the beginning level of development, population, health, infrastructure, political relations, just to name a few. For growth to be sustainable in the long run, you really need egalitarian growth. One reason that I think the United States has gotten away with the huge gains being received at the top without any real gains at the bottom is that those at the bottom are still able to subsist. The vast majority, which includes pretty much everyone except maybe the bottom 10-20% are able to live at least semi-comfortably. Since most are able to attain the basics needed for the lowest form of human existence, they may feel more content in their social and economic position as opposed to those who have no food or shelter or clothing. Not to say that those at the bottom of American society are well off or will forever be content. The increasing downward pressure on the lower class, compounded by health care and education problems may very well lead to drastic changes in the future, in the direction of a more egalitarian distribution. I suppose that the passion and urgency in which these changes are sought are higher when the basic demands of life are not met, which is usually not the case in this country.
I started this post wanting to comment on the idea of the United States being the most economically successful country in the world, but I have obviously digressed. I think I'll leave those thoughts for another post (maybe later tonight).
Wednesday, May 16, 2007
My issue with this is where does it end? Are all rituals or traditions open for patents and copyrights. Could I patent a prayer? Or maybe the patent only designates certain techniques or physical actions, as would apply to specific yoga poses. Would that allow me to patent the "jumpshot" or maybe baseballs pitching motion? Should I receive royalties every time a pitcher throws a strike? No? Then why should researches have to pay to study the breast cancer gene or why should poor farmers pay for seeds that have been created naturally for thousands of years? Privatization and patent protection may have certain benefits, but a line must be drawn when the private ownership acts to the detriment of the public good.
I think they is more to this that Baker did not explicitly touch on. One reason for the ease in off-shoring certain operations is where the consumer base is. Take the car manufacturers - it is easy for them to more production overseas because their consumer base is not specific to, say, Detroit. They sell cars all over the United States, so for them it would make sense to produce where the labor is cheapest, since they don't lose a significant consumer base in the process. A doctor, on the other hand, is dependent on his local consumer base. He receives no benefit from moving to a country where labor is cheap or environmental standards are low. By moving, he would lose his consumer base and the new consumer base would not likely be able to afford him the same wages he was used to in the more developed country. So, although public decisions such as trade agreements may influence certain off-shoring practices, private profit maximizing cost-benefit analysis is also considered.
I am in no way condoning off-shoring practices or sub-livable wages which are forced upon those low skilled workers. I just wanted to offer a bit of my own analysis of what contributes to this globalization problem. It is indeed a problem that needs to be dealt with, as the income gap grows at exceeding rates. If only we could all be as optimistic as Thomas Friedman (but that would require a substantial amount of arrogance, with a helping of ignorance on the side).
Tuesday, May 15, 2007
I read this quote today and it really set itself apart against the verbose rhetoric normally employed by Hume, and not just because it was one of the few sentences where I knew what every word meant without having to consult a dictionary. It is plain, simple, and overwhelmingly obvious. He goes on to say, "Indulge your passion for science...but let your science be human, and such as may have a direct reference to action and society". We too often rely on abstract models and charts and numbers and historical references; We forget the humanity. As an aspiring economist, this quote strikes very close to home. We often learn to use models to study humans. But humans are more than just supply and demand. We have become so detached from this idea that we have diminished men to mere mathematical points on a plane. We have alienated ourselves from our own actuality. You are no longer another person. You are a number, a statistic, a consumer, a produce, a means or an end, maybe both, a visitor to my web-blog (who am I kidding, these people don't exist). We have formed these identities, or perhaps we just formed into these identities, and have forgotten what it is that science or economics or philosophy is really trying to explain - the human condition: the how, why, and where the hell did we come from and what are we supposed to be doing. When we being to stray from the idea that the only real worthwhile field of study is the human existence, and that all else is really secondary, we lose the only real motivation for undertaking any sort of study.
This is perhaps why I am fascinated by the field of behavioral economics. I struggled with many of the basic assumptions of neo-classical economics - i.e. the unbounded rationality of humans, the insatiable self-interest (I'm clinging to the hope that not all behavior is motivated by pure greed. You can call me a dreamer...). I felt that they didn't factor in limitations that do affect real choices and outcomes - framing, bounded rationality (this one should have been pretty obvious. What rational person could think that unbounded rationality exists?), biases, and certain anchoring and depreciating affects. For me, these seemed so obvious. I don't think about marginal benefits or marginal costs when making my decisions. I wouldn't consider myself irrational (I got into college!). Shoot, if I see a commercial for a good looking ice cream cone, that might convince me to go buy it. Who cares if I even wanted an ice cream cone before hand. Who cares if I even like ice cream? Marketing can work wonders, and it surely has on me - although directly in violation of what neo-classical theory says should happen. Alright, I think I've ranted enough for one night.
I would just like to tip my hat to Congressman Paul who actually said something intelligible about 9-11 and its causes. Though I don't agree with a lot of his views (honestly, probably most of his views), it shocked me to hear a Republican say something other than "they hate our freedom" or "they are a culture of death". Kudos to him. Enjoy it, Republican Party, because it will probably be the only time you hear gracious remark aimed at one of your own from me.
So I’ve been reading a lot lately on trade topics - especially fair trade. Many people buy these products hoping to make this world a better place, while lifting a weight off their own backs (which are covered in sweatshop-produced garments colored with animal-tested dyes, no doubt). As much as I enjoy my fair trade cup of tea every morning (mmm…taste like justice), it would taste much sweeter if I had a strong understanding of the real economics behind it. The fair trade movement surely has its detractors. Why are they so angry about this seemingly philanthropic new business endeavor. Are they afraid more socially conscious consumers may begin unearthing the true evils that are inherent in many of todays consumer products and corporations? Maybe these “market interventions” will “decrease efficiency” (decrease profits?) or restrict the “invisible hand” from most efficiently allocating goods and services among rational consumers. I’m starting to sound like an economics textbook. Somebody please stop me…
During my research, I naturally stumbled across the topic of comparative advantage, most famously espoused by David Ricardo. This got me thinking about sweatshops and how comparative advantage played into that. I came to the conclusion that the comparative advantage of third world workers in sweatshops is their cheaper labor! Now, that is no illuminating discovery, for I think many people would agree that that is exactly what their comparative advantage is. But by restating that assertion in a different light will clarify my problem with this conclusion. What we are truly saying is that these people have a comparative advantage in being less productive. They have a comparative advantage in being poor, thus commanding lower wages. Is this really a comparative advantage? They are so desperate and undernourished that they will work for next to nothing and that is their comparative advantage against us? I don’t see how this would hold up. Maybe one day if I am a real economist (a.k.a. lose my soul) I will understand, but until then, I will continue to question.