The cost of production and living standards Saturday, Nov 7 2009

Updated below

There’s an interesting discussion at the SCSU scholars blog regarding capital and labor (click comments). Classical economic theory tells us that firms are (or at least seek to be) profit-maximizing (whether or not that is true will be ignored here). Profits, remember, are revenues minus (economic) costs. So one way firms can increase profits is by lowering the costs of production. Classical analysis states there are three factors of production: land and natural resources, labor, and capital (sometimes referred to as “the means of production”). It follows, as Dr. Banaian points out, that when the cost of labor relative to the cost of capital goes up, firms will substitute capital for labor when possible. That is, firms will attempt to increase profits by using the cheaper factor of production. (Of course, the decisions a firm can make in the long-term and in the short-term differ, but that will be ignored here. It is also important to note whether the market for labor and capital are perfectly competitive; it’s dubious, but I assume they are here for simplification.) Theoretically, a firm can look at their isocost and isoquant curves to determine the cost-minimizing combination of labor and capital, but we don’t need to get into that level of technical analysis.

Anyway, we might just assume firms will choose to replace capital with labor when it becomes cheaper to do so. Does this make cheap labor a bad thing, as “spencer” posits? He claims the move to labor-saving capital has been the key to rising standards of living (apparently the “liberal” position). Therefore, labor-intensity is a bad thing and high capital-to-labor ratios are a good thing. I don’t think it matters. In my mind, and I’m sure in the firm’s, what matters is what’s cheaper. If the cost of production is lower by increasing capital, then increase capital. If the cost of production is lower by increasing labor, then increase labor. That’s how I see it. That’s how you increase profits, which is assumed to be a good thing. Still others disagree, arguing that labor retention is a higher moral obligation than profit maximization (apparently the “conservative” position). In particular, the “radical perspective” in labor relations sees a conflict between capital and labor wherein organized labor fights against their exploitation by capital. The importance of the mobility of labor and the mobility capital is highlighted here, with the argument that capital is mobile and labor is more immobile (for example, a firm can lower wages just by threatening to move its manufacturing).

What I want to focus on, though, is the point that spencer makes. It reminded me of a passage I read from “Cannibals and Kings” by Marvin Harris (I’ve referenced the book on previous occasions—see here). Here is a somewhat long passage from pages 266-271—the end of Chapter 14 (“The Origin of Capitalism”) and the beginning of Chapter 15:

Capitalism, then, is a system that is committed to an unbounded increase in the production in the name of an unbounded increase in profits. Production, however, cannot be increased in an unbounded way. Freed from the restraints of despots and paupers, capitalist entrepreneurs still have to confront the restraints of nature. The profitability of production cannot expand indefinitely. Any increase in the quantity of soil, water, minerals, or plants put into a particular production process per unit of time constitutes intensification. It has been the burden of this book to show that intensification inevitably leads to declining efficiencies. That declining efficiencies have adverse effects upon the average standard of living cannot be doubted.

What must be made clear is that environmental depletions also lead to declining profits. The relationship is not easily understood because, according to the laws of supply and demand, scarcities lead to higher prices. Higher prices, however, tend to lower consumption per capita (the market symptom of declining living standards). Profits can be sustained temporarily if the drop in per capita consumption is compensated for by an expansion in total sales based on population growth or the conquest of international markets. But sooner or later the curve of rising prices caused by environmental depletions will begin to rise faster than the curve of rising consumption and the rate of profit must begin to fall.

The classic entrepreneurial response to a fall in the rate of profit is exactly the same as under any mode of production that has been overintensified. To compensate for environmental depletions and declining efficiencies (which manifest themselves as falling rates of profit), the entrepreneur seeks to lower the cost of production by introducing labor-saving machines. Although these machines require more capital and hence usually have higher start-up costs, they result in lowering the unit cost of production.

Thus a system that is committed to perpetual intensification can survive only if it is equally committed to perpetual technological change. Its ability to maintain living standards depends on the outcome of a race between technological advance and the relentless deterioration of the conditions of production. Under the present circumstances, technology is about to lose that race.

Chapter 15: The Industrial Bubble

All rapidly intensifying systems of production, whether they be socialist, capitalist, hydraulic, neolithic, or paleolithic, face a common dilemma. The increment in energy invested per unit time in production will inevitably overburden the self-renewing, self-cleansing, self-generating capacities of the ecosystem. Regardless of which mode of production is involved, there is only one means of avoiding the catastrophic consequences of declining efficiencies: to shift to more efficient technologies. For the past 500 years Western scientific technology has been competing against the most rapidly and relentlessly intensifying system of production in the history of our species.

Thanks to science and engineering, the average standard of living in the industrial nations is higher than at any time in the past. This fact, more than any other, bolsters our faith that progress is inevitable—a faith, incidentally, shared as much by the Comintern as by the U.S. Chamber of Commerce. What I want to emphasize here is that the rise in living standards began only 150 years ago, while the race between rapid technological change and intensification has been going on for 500 years. During most of the post-feudal epoch, living standards hovered close to pauperdom and frequently fell to unprecedented depths despite the introduction of an unbroken series of ingenious labor-saving machines.

I’ll leave analysis of the above excerpt up to the reader (keep in mind this was written in 1977).

Update: The Becker-Posner blog has a post about the recent upshoot in production vis-a-vis higher unemployment. Dr. Becker, an economics professor at the University of Chicago, argues that the increase in productivity is, in the long-run, a good thing despite the higher unemployment. His argument is that it will ultimately lead to higher employment, in the same way the advent of the computer, the Internet, biotechnology, or supermarkets have. He is assuming here, like “spencer” does at SCSU Scholars, that technological advances have been the source of the recent spike in productivity.

Posner’s response, however, is that technological innovations have not been the cause of increased productivity over the past two quarters. “More likely they have been due to old-fashioned cost cutting spurred not by technological advances but by economic distress. The only explanations I have seen offered for the productivity surge is cutting wages and working the workers harder. I have found no suggestion of any technological change that might be responsible for such a large, sudden surge in productivity,” he states. The optimism, then, that Dr. Becker displays seems to be unfounded. If firms are merely adapting to the dire economic situation simply by old-fashioned cost-cutting techniques, the spurt in productivity is not likely to last and not likely to result in increased employment.

2 Responses »

 

Libertarianism. What’s in a name? Sunday, Nov 1 2009

I just got done reading an excellent article by Kerry Howley in Reason, a libertarian magazine. I think the article raises some very thought-provoking questions concerning libertarianism.

What exactly is libertarianism, and what does it entail? Is it, as the article asks, the opposition to coercion and authority only by the state? Or does it entail opposition to other forms of coercion and authority outside of the state, such as that coming from cultural norms, societal practices, traditions, or other institutionalized structures and conventions? If libertarianism is concerned with liberty, particularly individual liberty, do we define it only as liberty from the state? Are there other ways individual liberty is restrained that libertarians ought to care about? Are there practices and norms all people calling themselves libertarians ought to fight against, “even if no one has bothered to codify the rules in an Important Book and call them ‘laws’”?

A central question for left-libertarians or leftist anarchists is whether private power is just as bad (or even worse) than state power. To them, the answer is a resounding “Yes.” This is why, for example, they oppose capitalistic economic orders that act to propagate “unaccountable private tyrannies” (corporations) and private property. Traditionally, libertarianism was associated with these leftists. Today, and most notably in the United States, “libertarianism” is associated with rightist libertarians—those who advocate free markets and the protection of private poverty. American libertarianism, most closely associated with the Libertarian Party, is very much a part of the Lockean imagination. To quote Ayn Rand:

The right to life is the source of all rights—and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.

These are profound remarks. According to Rand, “Those who advocate laissez-faire capitalism are the only advocates of man’s rights.” Similarly, as Murray Rothbard states, “Capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism.” As Howley explains, however, free markets and anti-statism are only one part of the story. “It’s possible to be an anti-government zealot with no interest whatsoever in individual liberty,” she writes.

According to Howley, “libertarians for whom individualism is important cannot avoid discussions of culture, conformism, and social structure. Not every threat to liberty is backed by a government gun. . . . when a libertarian claims that his philosophy has no cultural content—has nothing to say, for instance, about society’s acceptance of gays and lesbians—he is engaging in a kind of cultural politics that welcomes the paternalism of the mob while balking at that of the state.” As I said, I think this raises many interesting questions. Particularly, if we see a social injustice that we perceive to be limiting the individual liberty of certain people, is it our moral obligation to attempt to change that? If a particular society’s mores dictate that women should be restricted to the confines of the home, is it the libertarian’s job to fight against it? Importantly, would that not entail forcing our cultural preferences and ideals on others whom we might consider “backward”? As the response by Todd Seavey to Howley’s article strongly proclaims, “Freedom’s Just Another Word for Kerry Howley’s Preferences.”

Truly, all libertarians should be concerned with the exercise of authority, in any context. As the left-anarchist Noam Chomsky posits, “The core of the anarchist tradition, as I understand it, is that power is always illegitimate, unless it proves itself to be legitimate. So the burden of proof is always on those who claim that some authoritarian hierarchic relation is legitimate. If they can’t prove it, then it should be dismantled.” To wit, it is not enough to simply confront political and economic orders that restrict individual liberty; rather, it is required of us to oppose even the social and cultural orders that act similarly, working under the basis that power is illegitimate by assumption. Writes Howley, “In turning so definitively from the left, libertarians denied themselves a powerful vocabulary with which to engage discussions of individualism.” Even those libertarians concerned with free markets and other rightist agendas ought to concern themselves with other institutionalized forms of coercion and authority. The answer to the question “Are Property Rights Enough?”, I believe, is “No.”

Your own thoughts about the nature of libertarianism are invited.

5 Responses »

 

Business ethics and economics Thursday, Oct 29 2009

Today I attended a presentation given by Paul Neiman, an Assistant Professor of Philosophy at SCSU. The topic of his presentation was international business ethics. He focused on providing an ethical framework for conducting international business from a social contract perspective, expanding on the work of John Rawls and his “A Theory of Justice.” The presentation is based on a paper he is currently in the process of writing.

The basic premises are that social contracts should incorporate common shared presumptions that are reasonable and generally acceptable. Based on this, Dr. Neiman argues there are four restrictions that seem reasonable and generally acceptable to place on free markets:

1. Contractors should not be forced into accepting or rejecting principles.
2. Contractors should not be willfully deceived in arguing for or against principles.
3. All contractors must have an equal right to propose or argue against principles.
4. All contractors should expect that the terms of the social contract will be enforced.

These are all well and good. They are reasonable and generally acceptable rules to impose. The problem is when Dr. Neiman ventured into what these rules would result in for two contractors, one representing a corporation and another representing a community, coming to negotiate a deal but who are completely unfamiliar with their constituents. That is, the business contractor does not know anything about the corporation he is representing other than that they seek profit maximization. Likewise, the community contractor does not know anything about the community she represents except that they care about their living standards, their culture and social norms, their environment, and so on. These two people are then supposed to negotiate a deal based on the four rules above, and we’re supposed to assume both have an equality of power (the community does not desperately need the corporation and the corporation does not desperately need the community).

Based on these rules, Dr. Neiman posits that the negotiators will come to expect that the corporation is obligated to pay a living wage, be fully responsible for any environmental damage it creates, respect cultural and social norms all the time (i.e. not just when it is profitable to do so), and so on. Clearly it seems the balance of power rests with the community negotiator, not with the corporation (and Dr. Neiman justifies this by saying it is the community that has the deal-breaking terms, as if the corporation has none of its own).

To be frank, the presentation made little economic sense to me, as someone who is minoring in the subject. That’s just my opinion. Let’s take the living wage obligation, for example. Dr. Neiman says the community won’t accept any corporation that won’t pay its population a living wage because that would decrease their wages. I assume that means they won’t take any salary below the average. Already something seems quite wrong with this ethical framework. What happens to, say, cashiers at a grocery store? They usually don’t get paid a “living wage” because they do not add at least that much revenue to the company. If the marginal cost of an additional laborer does not at least equal the marginal revenue of hiring that laborer, the laborer won’t be hired. That is, the company won’t hire someone at a cost that exceeds the benefit that hiring that person would bring. Otherwise they’re just losing money. So what does this mean when we say the corporation is obligated to pay a living wage? Well, it means this theoretical world doesn’t have any cashiers or any other job, for that matter, that would normally pay less than a “living wage.” (That’s the classical argument against minimum wages, a topic I’ve explored here [by far my most popular post for some reason]. The difference, really, is in the magnitude in setting the minimum. The hypothetical purpose of a minimum wage, as I see it, is to set wages at an equilibrium price that clears the market, essentially correcting for market failures that exist. A “living wage” minimum sets it way above this level and is based more on ethical rather than economic arguments.)

So the result is actually very high unemployment because there is a lack of jobs. Jobs that cannot afford to pay a “living wage” won’t exist. People whose labor is not worth this living wage are out of luck. And I did ask Dr. Neiman about this problem. He essentially responded that he doesn’t buy the argument and that perhaps some people will just have to live unemployed to persevere the interests of the community, namely high wages. To me, this is a very astonishing ethical guideline he is proposing. What he is saying is that it is better to receive nothing rather than something. That it is better to live in poverty and in unemployment than to receive at least some amount equal to the worth of your labor (if your labor is worth less than the “living wage”). Is that ethical? Further, having people earning zero rather than even a minimal amount decreases the average wage, what Dr. Neiman was originally against.

Leave a Response »

 

Re: SuperFreakonomics & global warming Sunday, Oct 25 2009

A little while ago, I wrote about the “the globe is currently cooling” myth, which, unfortunately, was propagated in Steven Levitt and Stephen Dubner’s new book, SuperFreakonomics. As I explained earlier, I was big fan of their earlier book, Freakonomics, which is why I was disappointed to learn of their unfortunate mistake. I also linked to two criticisms of Levitt and Dubner’s chapter on global warming (which can be read here). A lot has happened since then.

Most recently, Dr. Levitt wrote a blog post at the Freakonomics blog defending the chapter. Mr. Dubner also wrote a post defending the chapter and going after one of the main criticizers, Joseph Romm. Dr. Romm wrote one of the original critiques (which I linked to in my previous post, along with Dr. Connolley’s), pointing out errors and Levitt and Dubner’s misrepresentation of the main scientist they used for their chapter. The links I’ve just provided here provide plenty of background to the controversy as well links to other posts surrounding the ill-fated chapter, including responses by Nobel laureate Paul Krugman, Union of Concerned Scientists, Tim Lambert, Gavin Schmidt of NASA, and plenty others.

The gist of the controversy, from I found sifting through the countless attacks and defenses of the chapter, is that Levitt and Dubner misrepresented Ken Caldeira, the main climate scientist they refer to in their chapter; make several errors in their analysis of the science; and advocate geo-engineering (pumping sulfate aerosols into the atmosphere) as opposed to greenhouse gases reductions as the preferable way to mitigate the effects of anthropogenic global warming. For a more thorough understanding of the controversy, visit some of the links I’ve posted above as well as the links the authors of those posts provide. From my perspective, it seems that Levitt and Dubner have chosen the contrarian position and pushed forward shocking conclusions because, frankly, that’s one way to become bestsellers. Unfortunately, there was a not a lot of room for mistake and errors were certainly made. The barrage of criticism across the Web has been unrelenting as a result.

But what is the core issue, particularly as the book deals with it? The core issue here, as I see it, is the best way to deal with the climate crisis (which everyone agrees exists). Levitt and Dubner advocate geo-engineering as the solution, as a means to reflect sunlight and thus reduce global mean temperatures. They say it is a quick and cheap solution. On the other hand, they disagree with lowering emissions because it is a long and difficult process that could cost what they say is thousands times more than their solution. (Part of the disagreement is that Dr. Caldeira is very much for eliminatation of carbon emissions and supports research into geo-engineering, which is not reflected in the book.) As Dr. Levitt points out, the question they’re answer is, What is the cheapest and fastest way to cool the Earth? He says environmentalists and scientists are asking other questions: “The sorts of questions they tend to ask are ‘What is the “right” amount of carbon to emit?’ or ‘Is it moral for this generation to put carbon into the air when future generations will pay the price?’ or ‘What are the responsibilities of humankind to the planet?’“

Is it the case that geo-engineering is the correct solution while reducing greenhouse gas emissions is not? It’s doubtful. Dr. Caldeira argues that our emissions are necessarily wrong: “I compare CO2 emissions to mugging little old ladies … It is wrong to mug little old ladies and wrong to emit carbon dioxide to the atmosphere. The right target for both mugging little old ladies and carbon dioxide emissions is zero.” So already we see that Dr. Caldeira is very much opposed to greenhouse gas emissions, though SuperFreakonomics claims, “Yet his research tells him carbon dioxide is not the right villain in this fight.” Quite preposterous. Dr. Caldeira continues in his e-mail to Dr. Romm:

I am in favor of fire insurance but I am also against playing with matches while sitting on a keg of gunpowder. I am in favor of research into geoengineering options but I am also against carbon dioxide emissions.

Carbon dioxide emissions represent a real threat to humans and natural systems, and I fear we may have already dawdled too long. That is why I want to see research into geoengineering — because the threat posed by CO2 is real and large, not because the threat is imaginary and small.

The problem that Levitt and Dubner fail to account for is that greenhouse gas emissions are responsible for many changes besides just temperature increases. That’s why “climate change” is becoming a more popular term than “global warming.” Warming is just one aspect of it. The effects our actions have on climate are broad, including ocean acidification, changes in rainfall patterns, extreme weather events, and so on. While pumping sulfate aerosols into the stratosphere may take care of the temperature problems, it neglects a whole host of issues that are caused by human activity. Furthermore, the proposals Levitt and Dubner make are likely to have their own negative effects as well as technical and strategic issues. Writes Dr. Schmidt, “if the planet was a single column with completely homogeneous properties from the surface to the top of the atmosphere and the only free variable was the surface temperature, it would be fine. Unfortunately, the real world (still) has an ozone layer, winds that depend on temperature gradients that cause European winters to warm after volcanic eruptions, rainfall that depends on the solar heating at the surface of the ocean and decreases dramatically after eruptions, clouds that depend on the presence of condensation nuclei, plants that have specific preferences for direct or diffuse light, and marine life that relies on the fact that the ocean doesn’t dissolve calcium carbonate near the surface.” Add to that “unknown unknowns” and it seems the geo-engineering proposal is not the cheap or desirable solution it was made out to be.

What about reducing emissions? Claims Dr. Levitt, “a third problem with reducing carbon emissions, which is that it requires worldwide behavioral change, which will be hard to achieve.” Why is that the case? Mr. Dubner explains, “We discuss how it’s a very hard problem to solve since pollution is an externality – that is, the people who generate pollution generally don’t pay the cost of their actions and therefore don’t have strong incentives to pollute less.” Well then… make them pay the cost of their actions! I wrote earlier that global warming represents the greatest market failure ever. The solution is that you correct for that market failure, meaning people pay for the consequences of their actions. Dr. Stern explains, “People would pay a little more for carbon-intensive goods, but our economies could continue to grow strongly.” Dr. Levitt, I’m sure, knows that behavioral change is not that hard, especially when we realize that people respond to incentives—a core economic principle (and the center of their first book). Right now, the cost of emitting greenhouse gases is far less than the actual cost of doing so, meaning there is little (economic) incentive to stop engaging in carbon-intensive activities. As Dr. Schmidt points out, the problems of lead in gasoline and CFCs in spray cans were solved by increasing the costs of these things, which has led to the elimination of both. Nothing says we can’t do the same for greenhouse gas emissions.

Update: Indeed, Dr. Levitt is fully aware. Here’s a quote from Chapter 3: “People are people, and they respond to incentives. They can nearly always be manipulated — for good or ill — if only you find the right levers.”

Update2: Brian Dupuis has a collection of links that may be helpful in following the controversy.

Leave a Response »

 

Globalization. What’s in a name? Saturday, Oct 24 2009

Today, what we call globalization has become ubiquitous. Needless to say, “globalization” has fierce and unrelenting critics; perhaps chief among them is Joseph Stiglitz. Dr. Stiglitz, a professor at Columbia University and the former Chief Economist at the World Bank, won the Nobel Prize in economics in 2001 with two others for his contributions to our understanding of asymmetric information in markets. He has also made what I feel are important contributions to our understanding of the inequities that “globalization” bring about around the world, particularly with his two books, Making Globalization Work and Globalization and Its Discontents. While people like Thomas Friedman may write that “The World Is Flat,” in reality, we know that the playing field is not even but is tilted.

But how can we talk about globalization without first knowing what it is? So, what is globalization? Being an international business major, a lot of my courses have dealt with defining and discussing globalization. Probably the most common definition I hear is “the integration of businesses into world markets,” or something along those lines. That’s one particular way to define it. Used neutrally, however, the term globalization means international integration (that is, of any form). The term is not used neutrality, though. The term, in its current usage, “has been appropriated by a narrow sector of power and privilege.”

The term, as appropriated by the neoliberals, is meant to describe an economic order that favors investor rights over the rights of people. Some people refer to it as market fundamentalism, but I disagree. What is being advocated under this appropriated term really has nothing to do with free markets and is, frankly, and affront to markets. In fact, in incorporates very little of what Adam Smith advocated in The Wealth of Nations, the seminal work that neoliberals are always quick to cite. Take, for example, the free circulation of labor. It’s impossible to talk about free markets without the free circulation of labor. Smith wrote, “the policy of Europe, by obstructing the free circulation of labor and stock both from employment to employment, and from place to place, occasions in some cases a very inconvenient inequality in the whole of the advantages and disadvantages of their different employments….Whatever obstructs the free circulation of labor from one employment to another obstructs that of stock likewise.” This is part of the “perfect liberty” that Smith said would lead to “perfect equality.” Instead, there has been great work to limit the free movement of labor. In fact, in 1994, President Clinton went so far as to militarize the border in what was called “Operation Gatekeeper.” Why 1994? Because that was the year of NAFTA.

What is NAFTA? It is touted as a “free trade agreement” between Canada, Mexico, and the United States (it got the “NA” part correct) whereby barriers to trade and investment are eliminated. What does NAFTA really mean? It means Mexico opens it borders to highly subsidized U.S. agribusiness. This drives the peasants off their land because they cannot compete with this U.S. taxpayer-funded agri-exports. Consequently, they flee to urban slums (what’s called urbanization), driving down wages, allowing for large multinational corporations to exploit their cheap labor. That produces what’s called an “Economic Miracle,” where typical economic indicators like GDP, FDI, and corporate profit soar but the masses approach pauperization. That’s what America means by “free trade.”

What has this particular form globalization brought us? In what is hailed as the era of liberalization and globalization, world GDP growth rates have decreased by nearly 38% over the past 24 years (using the 2003 as the latest year with available figures) compared to the 24 years prior to that (the Bretton Woods era), according to data provided by Angus Maddison. Likewise, Americans have seen stagnated wages. The inequality of distribution of wealth has been simply remarkable, everywhere. Poverty in the U.S. saw a steady decline through the ’60s and ’70s; the ’80s, however, saw an incline in poverty and it has remained relatively unchanged since. Meanwhile, speculative capital flows have erupted, bringing with them destabilization, as Stiglitz has argued. It has also had the effect of wiping out domestic production for domestic needs, as we’ve seen in Mexico. Because local producers cannot compete with U.S.-subsidized agribusiness, many Third World nations must rely on what are called cash crops (as opposed to subsistence crops): bananas, cotton, coffee, sugar, etc. But not all the export crops are as innocuous as bananas; they also include coca, marijuana, poppy, and other drugs that fuel the current-day drug war, with Peru’s president calling the cocaine business the “only successful multinational to emerge” from Latin America in the face of globalization. It has certainly only given more credence to dependency theory.

Naturally, anyone that opposes this particular form of globalization gets called “anti-globalization.” It’s unfortunate because it’s not true, with the exception of very tiny minority who are truly anti-globalization, in the neutral sense of the word. International integration is, in fact, a great thing, as the people at the World Social Forum and other places have been espousing for years. It, however, should not be based on the blind faith in the religion of neoliberal markets, but rather should include more awareness for the rights of laborers, corrections for obvious market failures, and environmental protection as proposed by the adherents of alter-globalization.

Leave a Response »

 

The greatest market failure ever Sunday, Oct 18 2009

The story of anthropogenic global warming is a story of “the greatest market failure the world has seen.”

That’s from Sir Nicholas Stern, a British economists at the London School of Economics and the Chief Economist of the World Bank from 2000 to 2003, who authored the Stern Review. The Stern Review is a 2006 report discussing the economics of global warming and is the most thorough and cited report on the subject. The report highlights the grave economic consequences of leaving global warming unabated. On the other hand, Stern said his report is “essentially optimistic.” The Review states that we can curtail the worst consequences of global warming if we act immediately. The longer we wait to take action, however, the costlier it will be in the long run. (In fact, the delays we’ve already been taking have been costing us quite a bit.) What the report makes abundantly clear is that the cost of mitigating global warming is far exceeded by the costs to the world economy if should choose to continue “business as usual.” In other words, it makes economic sense to work towards mitigating global warming (if people were rational and self-interested anyway). There is no longer any question that there is a benefit to mitigating global warming. The real question is why we haven’t been working towards that goal.

The existence of global warming highlights the inefficiency of markets. Stern explains:

The science tells us that GHG emissions are an externality; in other words, our emissions affect the lives of others. When people do not pay for the consequences of their actions we have market failure. This is the greatest market failure the world has seen. It is an externality that goes beyond those of ordinary congestion or pollution, although many of the same economic principles apply for its analysis.

This externality is different in 4 key ways that shape the whole policy story of a rational response. It is: global; long term; involves risks and uncertainties; and potentially involves major and irreversible change.

Further, “If we take no action to control emissions, each tonne of CO2 that we emit now is causing damage worth at least $85 – but these costs are not included when investors and consumers make decisions about how to spend their money.” Curtailing global warming would mean “People would pay a little more for carbon-intensive goods, but our economies could continue to grow strongly.“

Explains oilman and adviser for President Bush, Matthew Simmons, “‘A crisis is a problem that was ignored.’ All great crises were ignored until it was too late.” The question now is whether we will wait until it’s too late to take action. I believe it is our moral imperative that we not.

One Response »

 

Is it just us, or has it gotten cold in here? Tuesday, Oct 13 2009

It’s just us.

There is a lot of ado about what the weather has been like since 1998. According to some measurements, 1998 was the warmest year on record (see, e.g., here and here). According to these data, 2005 was the second warmest year on record (by vary narrow margins). According to other data sets, 2005 was the warmest year and 1998 was the second warmest (see, e.g., here). What’s not in dispute is the reason why 1998 was exceptionally hot: it was the same year that there was the strongest El Niño of the 20th century. (El Niño is a weather phenomenon with the ocean and atmosphere linked to periodic warming and La Niña is something similar linked to periodic cooling. See here for more information.)

So why the discrepancies between the data sets? The folks of RealClimate give an explanation here. Essentially, HadCRUT 3V data provided by the Climate Research Unit, which suggests 1998 was the warmest year, has significant gaps in its coverage, particularly over the Arctic where warming has been the most pronounced. When you’re missing data from where temperatures have been increasing the most, your data are going to be skewed. So that data are missing an important data source, which is the Arctic. The scientific literature has made note of this and explains why there are some discrepancies as far as which year was the warmest on record.

The septics (a term I borrow from William M. Connolley — see explanation here), however, maintain that 1998 was definitely the hottest year on record so therefore “global warming has stopped for the past 11 years.” This is such a favorite of theirs that it’s gotten into the mainstream media, which, after all, is interested in sensationalism.

Alas, Steven Levitt and Stephen Dubner fall for this specious argument in their new book, SuperFreakonomics. I was a big fan of their work in the first book, Freakonomics, which is why I am disappointed to see they’ve ventured into an area neither of them are competently familiar with and get their facts very messed up. The chapter in question can be read here. For some critiques, see here (Dr. Connolley’s) and here (Dr. Romm’s).

Like I said though, it’s a popular argument. For example, in an argument about a post over at the SCSU Scholars blog (click comments), the specious argument came up multiple times as a means to disprove anthropogenic global warming. How can it be, the septics ask, that CO2 has been rising but temperatures have not since 1998 (again, assuming 2005 was not the warmest year because that would hurt their argument)? It’s a classic case of cherry picking data. If this year isn’t the warmest year, the septic will pick the previous record and ask why the Earth is cooling.

Sorry, it doesn’t work that way. First of all, climate is considered weather averaged over a 30-year period. Not 11 years, but 30 years (as a general rule). So, yes, they’re cherry picking. And it’s not like this is anything abnormal. Year-to-year variation is to be expected (and predicted in the models, contrary to some claims). When we say that temperature will increase in the long term, no one is claiming that they will go up in a straight line, yet this is what the septics are expecting when they make this argument. In reality, however, long-term upward trends are observable even when there are year-to-year natural variations. The IPCC predicts .11 to .64 °C temperature increases per decade during the 21st century. This is consistent with the past decade:

The graph above is annual global mean surface temperature (land and ocean) anomalies in degrees centigrade with a 1951-1980 base using this data set provided by NASA’s Goddard Institute for Space Studies. In more ordinary language, it’s a graph of temperature changes from 1980 until 2008. The black line is the 25-year trend line. The two shorter lines are 10-year trend lines. The most recent decadal trend (1999-2008) is the yellow one showing a 0.19 ºC per decade trend, consistent with the IPCC’s range.

So what does 1998 tell us about the overall trend in temperatures? Not a lot. If anything, it shows that temperatures have been steadily increasing to new extremes since the Industrial Revolution, when humans began to emit greenhouse gases into the atmosphere at massive and unprecedented levels. What we have seen since 1998 is consistent with the anthropogenic model of global warming (see, e.g., my graph above, here, here, and here).

One Response »

 

How long? Tuesday, Oct 13 2009

How long must we, American taxpayers, continue to support Israeli war crimes? Israel is the largest recipient of American foreign aid (ignoring, at the moment, Iraq and our war there). We support Israeli publicly, materially, diplomatically, and monetarily. What we do directly contributes to Israeli war crimes. And there is no longer any doubt about it: Israel is an occupying force in Palestine. That makes just about everything we and Israel do there war crimes. There is no international support to speak of in discussing U.S.-Israeli crimes in Palestine.

A recent and glaringly blatant example was Israel’s offensive against Gaza almost a year ago. The U.S.-Israeli attack (“U.S.-Israeli” because nothing Israel does is possible without the U.S.’s support) was recognized as contrary to international law and the actions committed by Israeli forces as constituting egregious war crimes. Just recently, a four-judge commission led by the distinguished Richard Goldstone (a Jew and supporter of Israel) released a report for the UN Human Rights Council condemning both Israel and Hamas for their war crimes, noting that Israel was responsible for an overwhelming majority of them, “indicating serious violations of international human rights and humanitarian law were committed by Israel during the Gaza conflict.”

What was Israel’s response? Yesterday, Prime Minister Benjamin Netanyahu declared that Israel would never allow its leaders or its soldiers to be tried for their crimes (following in the footsteps of the U.S.). Netanyahu defended this assertion by stating Israel has the right to defend itself. While Prime Minister Netanyahu is correct, it’s not true that Israel has the right to defend itself with force. It had no right to attack and invade Gaza. Israel is recognized as an occupier, and occupiers have no rights; but they do have obligations. So if Israel wanted to defend itself from rocket attacks, it had the obligation to withdraw from Palestine.

But what Israel (and the U.S.) is doing when it declares that it won’t prosecute war crimes is that it is declaring the Nuremberg trials a farce. U.S. Justice Robert Jackson made a point of this at the Nuremberg trials, at which he was the chief of counsel for the prosecution. He stated: “If certain acts of violation of treaties are crimes, they are crimes whether the United States does them or whether Germany does them. And we are not prepared to lay down the rule of criminal conduct against others which we would not be willing to have invoked against us. We must never forget that the record on which we judge these defendants is the record on which history will judge us tomorrow. To pass these defendants a poisoned chalice is to put it to our own lips as well.” The U.S. and Israel have sipped from the “poisoned chalice” but have refused to allow their crimes to be prosecuted. So we’re saying the work of Justice Jackson and the Nuremberg trials were mere legal farce. If you don’t think the proceedings were just a farce and merely for show, then you must advocate for prosecuting those who have sipped from the “poisoned chalice.”

Finally, notes Human Rights Watch’s Sarah Whitson, “The Obama administration cannot demand accountability for serious violations in places like Sudan and Congo but let allies like Israel go free.”

Leave a Response »

 

Glenn Beck: hypocritically unconstitutional? Sunday, Oct 11 2009

Glenn Beck has certainly gotten a lot of disrespect on this blog (less than he certainly deserves), but it’s probably not particularly helpful to attack individuals in such a manner. He’s just a television pundit, after all. I have to admit, though, it’s really easy to do. And, unfortunately, he reaches a lot of people with his faux libertarianism (shooting untried suspects in the head has nothing to do with the philosophy). That could make him a potentially dangerous person, so it might be fair to say his statements deserve careful attention and scrutiny.

The crying talking head has, in the past, criticized international law. Opines Beck, “Once we sign our rights over to international law, the Constitution is officially dead. When you say things like, ‘We are not going to put the Constitution behind international law,’ you say that in the international court, if you say that on the floor of the United Nations, you are a freak show.” So what Beck is arguing is that when we adhere to international law and regulations, we are ignoring our U.S. Constitution. He continues, “Let me tell you something. When you can’t win with the people, you bump it up to the courts. When you can’t win with the courts, you bump it up to the international level.” Words of wisdom? In literature, you’d call that foreshadowing.

So what does Mr. Beck do when he doesn’t like a satirical Web site about him being published on the Internet? You probably guessed it: he filed a complaint with the World Intellectual Property Organization to have the site taken down. The site in question is http://glennbeckrapedandmurderedayounggirlin1990.com, a purely satirical Web site that mocks Mr. Beck’s style of argumentation. Writes the authors of the Web site, “We’re not accusing Glenn Beck of raping and murdering a young girl in 1990 – in fact, we think he didn’t! But we can’t help but wonder, since he has failed to deny these horrible allegations.” Perhaps we could argue that it’s in bad taste, but I think it’s abundantly clear that it is Constitutionally protected speech. Mr. Beck and his lawyers know this too. That’s why they aren’t filing a libel suit against the Web site’s owners. They know the authors of this site are Constitutionally protected. They know they wouldn’t “win with the courts.” So, as Mr. Beck declared with great prophetic wisdom, “you bump it up to the international level.” Yeah, that’s one way to stifle free speech you don’t like.

As an example of the type of parodying the site does, here is what Mr. Beck said in an interview with Minnesota Congressman Keith Ellison, the first Muslim in U.S. Congress: “No offense and I know Muslims, I like Muslims, I’ve been to mosques, I really don’t think Islam is a religion of evil. I think it’s being hijacked, quite frankly. With that being said, you are a Democrat. You are saying let’s cut and run. And I have to tell you, I have been nervous about this interview because what I feel like saying is, sir, prove to me that you are not working with our enemies. And I know you’re not. I’m not accusing you of being an enemy. But that’s the way I feel, and I think a lot of Americans will feel that way.” Well, perhaps, posits this Web site, Mr. Beck should prove to us that he has not “raped and killed a young girl in 1990.” They know he didn’t and aren’t accusing him of it, they just want to get to the bottom of it. Of course that’s not really the case. No one actually believes that, as the site explains; it’s created to show how “Glenn Beck definitely uses tactics like this to spread lies and misinformation.” As Mr. Beck asks, “What’s wrong with asking questions?” In the legal response to Mr. Beck’s complaint, the Web site’s lawyer writes that the site “has merely presented Mr. Beck with a mirror. If Beck does not like what he sees, the Respondent is not to blame.” (The Web site’s legal response is down due to traffic; but if you do get the chance to read it, do so. It’s quite genius.)

On a much serious but unrelated note that deals with rape, however, the Huffington Post published a story that I found quite disappointing. The Huffington Post points to a horrific story of a young woman, Jamie Leigh Jones, who was gang-raped by her coworkers at KBR, Inc., a subsidiary of Halliburton. She was then locked in a shipping container for over a day, without food or water. KBR/Halliburton’s defense was that the horrendous attack was considered an injury “arising in the workplace” and was therefore necessary to be adjudicated through private arbitration rather than through courts. The Department of Justice agreed. In September, however, the 5th Circuit Court of Appeals sided with Jones. Al Fraken, the new U.S. Senator for Minnesota, passed a new amendment, heeding Jones’ calls, that calls for punishing contractors that “restrict their employees from taking workplace sexual assault, battery and discrimination cases to court.” It passed, but not unanimously. Thirty Senators (all Republican, surprise) voted against the amendment to Defense Appropriations bill. The Huffington Post link lists those Senators. They really ought to be ashamed.

3 Responses »

 

Anarchism in St. Cloud Thursday, Oct 8 2009

Two Wednesdays ago, St. Cloud got a sort of impromptu visit from the Motorhome Diaries guys. They are essentially three guys driving around the country in a motorhome spreading the word of liberty to people they meet along the way. They stopped in on SCSU for a little while to talk to a couple of people (about a dozen or so), most of them from the Libertarian Party club and the Young Americans for Liberty organization, and few other open-minded people.

These people described themselves as voluntaryists, meaning only decisions or actions that are made voluntarily are just and moral. They therefore oppose the state, which they see as coercive and necessarily violent. They also support anarcho-capitalism, which would be a completely stateless society in which completely unfettered laissez-faire capitalism constitutes the mode of production. The gist of their argument, I think, is that any voluntary association should be allowed so long as it does not interfere with the rights of others. Being forced to pay taxes, live in a statist society, follow statist regulations, and so forth are seen as involuntary and enforced only through the use of force and coercion by the state. Because the state lacks voluntary association, it is seen as illegitimate.

So the work these guys do is to oppose the state based on these premises. However, they, like most voluntaryists, wish to do so by working outside of state institutions. That is opposed to the Libertarian Party’s method of working within state institutions by, for example, electing officials into government for the purpose of reducing government. Instead, they opt for non-political means such as civil disobedience. Their stance reminded me of a discussion I had with Filip Spagnoli. While I agree the state is the largest perpetrator of violence and destruction, I think it’s helpful to try to improve the state. And I think one way you can do that is through electing officials that will help the cause of reducing government and ending state violence. It would be a more gradual change. I think that’s a noble cause. It’s certainly more realistic, in my opinion, than abolishing the state outright, especially given its current size.

I think that’s where I disagree with these guys. Nevertheless, I appreciate their visit and sharing their ideas about ideal society. It was intriguing, and I’m sure a new concept for many people at the meeting. Anarchism is often seen in a negative light, as a chaotic system, disorganized, lawless, and so on. The Motorhome Diaries help dispel these myths. I think anarchism is a legitimate political philosophy (it’s quite broad) and merits our careful attention as such.

Leave a Response »