Community Wisdom

Wednesday, May 20th, 2015

Conservation groups often write about community wisdom:

It seems to refer to the idea that rural communities know much better than others how to sustainably manage their environments and natural resources. Reading some of the NGO texts, all we need to do is to let environmental decision-making be guided by these community folks, and all will be fine. What a total crackpot idea!

I think community wisdom is a complete fallacy. More importantly, I worry that this bad joke is undermining the effectiveness of conservation efforts.

On exactly what information is the assumption based that local communities have the traditional wisdom, practices and altruistic interests to forego individual gain for greater communal benefit? As far as I am aware evidence points in exactly the opposite direction — communities are as unable to manage their environments sustainably as anyone else (urban folk, government institutions, industries etc.).

It doesn’t take much digging in the literature about community resource use in Indonesia to find evidence of communities locally exterminating species (like tigers or warty pigs on Java, or rhinos, orangutans, crocodiles or expensive song birds in Kalimantan and Sumatra), or natural resources like Ramin wood, which had been virtually wiped out in the lower Barito region in Kalimantan by 1840, about 120 years before industrial-scale logging started. Similarly, unsustainable slash-and-burn agriculture had already turned large parts of the Kapuas and Barito basins into grasslands by the start of the 20th century.

Of course, the scale of environmental destruction significantly increased after the 1960s when the technological and financial means became available to exploit the natural resources in vast parts of Indonesia. This represents a scale difference though and not an essential difference between local communities and all the other people, businesses and institutions.

Community wisdom may exist, but it doesn’t transfer to new conditions. If the old ways weren’t sustainable, they died out. And sustainable doesn’t mean awesome:

Most anthropological and social research in Indonesia shows that the forest people of Kalimantan and Sumatra cannot wait to get out of the forest, get their kids to decent schools, access to good hospitals, and comfortable roads to drive bikes and cars on. If they are stuck in their environment, it is more often than not because they do not actually have the means to get out. As soon as someone strikes gold (literally, or maybe a village-head selling some land to mining or oil palm) these forest-loving people in harmony with nature are off into the provincial cities on the next boat, bus or plane.

Hunting and Conserving Rhinos

Wednesday, May 20th, 2015

A Texas hunter bid $350,000 for the right to hunt a rhino in Namibia:

Knowlton’s $350,000 will go to fund government anti-poaching efforts across the country. And the killing of an older rhino bull, which no longer contributes to the gene pool but which could harm or kill younger males, is part of the science of conservation, he argues.

Naturally, this makes him a terrible person:

“I think people have a problem just with the fact that I like to hunt,” Knowlton said. “I want to see the black rhino as abundant as it can be. I believe in the survival of the species.”

How Wealth Shapes Personality

Monday, May 4th, 2015

Jessi Streib explains how wealth in childhood shapes personality later in life:

People who grew up in households without much money, predictability, or power learn strategies to deal with the unexpected events that crop up in their lives. Often, these strategies are variations of going with the flow and taking things as they come. Sometimes there’s no other option.

Isabelle, for example, is the daughter of a farmer and a bartender. (All the survey participants have been given pseudonyms.) Her family did not know how much money each year’s crops or tips would bring in. They did not know when a debt collector would call. Thinking about money could not change the fact that it came in unpredictably and that sometimes there wasn’t enough. With little she could do to change the situation, Isabelle learned to go with the flow. She would not think too much about money, but spend as she needed to get by.

People who grew up with parents who had more money, job security, and power grow up with more stable lives. In these conditions, they learn that managing their resources makes sense — both because their lives are predictable enough that they can plan and because their resources are plentiful enough that they can make meaningful choices. Spouses with middle-class backgrounds wanted to manage their resources by planning.

Leslie, another woman who participated in the study, grew up the daughter of a manager. Her family had enough money and power that they had options. They could decide whether to spend money to go on a vacation or to invest in private school. Either way, their plan could be carried through.

This difference — taking a hands-off approach or a hands-on one — followed individuals from their pasts and into their marriages.

It shaped nearly every aspect of their adult lives. In regards to money, work, housework, leisure, time, parenting, and emotions, people with working-class roots wanted to go with the flow and see what happened, while their spouses with middle-class backgrounds wanted to manage their resources by planning, monitoring, and organizing.

There’s an obvious question of causality there.

The Hidden Politics of Video Games

Saturday, May 2nd, 2015

If you’re going to discuss the hidden politics of video games, perhaps a long list of explicitly political simulations isn’t the way to go:

Games can be criticized for being too violent, or a brain-dead waste of time. But they are not usually criticized for being political. Games are entertainment, not politics, right?

However, consider the popular computer game Sim City, which first debuted in 1989. In Sim City, you design your metropolis from scratch, deciding everything from where to build roads and police stations to which neighborhoods should be zoned residential or commercial. More than a founder or a mayor, you are practically a municipal god who can shape an urban area with an ease that real mayors can only envy.

But real mayors will have the last laugh as you discover that running a city is a lot harder than building one. As the game progresses and your small town bulges into a megalopolis, crime will soar, traffic jams will clog and digital citizens will demand more services from their leaders. Those services don’t come free. One of the key decisions in the game is setting the municipal tax rate. There are different rates for residential, commercial and industrial payers, as well as for the poor, middle-class and wealthy.

Sim City lets you indulge your wildest fiscal fantasies. Banish the IRS and set taxes to zero in Teapartyville, or hike them to 99 percent on the filthy rich in the People’s Republic of Sims. Either way, you will discover that the game’s economic model is based on the famous Laffer Curve, the theoretical darling of conservative politicians and supply-side economists. The Laffer Curve postulates that raising taxes will increase revenue until the tax rate reaches a certain point, above which revenue decrease as people lose incentive to work.

Finding that magic tax point is like catnip for hard-core Sim City players. One Web site has calculated that according to the economic model in Sim City, the optimum tax rate to win the game should be 12 percent for the poor, 11 percent for the middle class and 10 percent for the rich.

In other words, playing Sim City well requires not only embracing supply-side economics, but taxing the poor more than the rich. One can almost see a mob of progressive gamers marching on City Hall to stick Mayor McSim’s head on a pike.

Sim City is only a game, yet it is notable how many people involved in economics say it gave them their first exposure to the field. “Like many people of my generation, my first experience of economics wasn’t in a textbook or a classroom, or even in the news: it was in a computer game,” said one prominent financial journalist. Or the gamer who wrote, “SimCity has taught me supply-side economics even before I studied commerce and economics at the University of Toronto.”

Other games also let you tinker with politics and economics. Democracy 3 allows you to configure the government of your choice. The ultra-cynical Tropico is the game where the player—who is El Presidente of a kleptocratic Latin American government—can win by stashing enough loot in his Swiss bank account. In Godsfire, a 1976 boardgame of galactic conquest, players roll dice each turn to see what kind of government rules their empire. Extremist governments only build warships to attack their neighbors, Moderates spend less on defense and more on economic growth and Reactionaries will only spend money on planetary defenses (which also double as domestic riot suppression systems for keeping the citizenry in line).

However, the best example of politics and games is the legendary Civilization, an empire-builder and bestseller since it debuted in 1991.

[...]

Admittedly, some Civ political depictions are debatable. Communism in Civ 4 increases food and factory production and reduces waste from corruption? Someone should have told this to the Soviets in 1989, or China’s rulers today. Authoritarian regimes can’t create new technologies? Cheery news for Londoners who watched their city destroyed by Nazi V-2 rockets in 1944. Democracies embrace science? In Civ 3, the first nation to discover Darwin’s Theory of Evolution gets a science bonus, a game feature that some Kansas school boards would disapprove of.

What is most remarkable about the politics of Civ is how unremarkable all this seems to an American like myself.

All that is given to us

Thursday, April 30th, 2015

Problems in Baltimore run much deeper than Mr. Gray’s death and the conduct of the police, according to the New York Times:

Near the burned-out CVS, Robert Wilson, a college student who went to high school in Baltimore, said: “With the riots, we’re not trying to act like animals or thugs. We’re just angry at the surroundings, like this is all that is given to us, and we’re tired of this, like nobody wants to wake up and see broken-down buildings. They take away the community centers, they take away our fathers, and now we have traffic lights that don’t work, we have houses that are crumbling, falling down.”

I can’t imagine why the people currently acting like animals or thugs haven’t been given better surroundings. What was the House Fairy thinking?

Why CEOs make so much money

Tuesday, April 28th, 2015

A retired CEO explains why CEOs make so much money — or, rather, why they started making so much more a couple decades ago:

Thank our regulators and corporate governance efforts to reduce CEO compensation through disclosure and oversight of board decisions.  I’ve been a long time observer of public companies and a reader of their proxy statements. In 70’s and even the 80’s the compensation of the CEO seemed to be mostly a matter arrived at between the board and the CEO that resulted from discussions and negotiations and the public disclosure was a matter of a few pages. But there was then nothing like the  pressure to conform to best practices backed up by the reliance upon the advice of consultants and the concommitant availability of market data that there is today.

You can guess how it works. No board that isn’t about to fire its CEO really wants to admit that their CEO is a less-than-average performer by paying him or her less than average. But if the lowest-paid CEO’s are always being brought up to the average, then the average increases every year. Then for the high performers to be paid well, their compensation needs to be increased, but that raises the average… and so on every year. And the compensation committee and the board always have this market data before them, the recommendations of their consultants and “best practices” to adhere to. These influences are not easily resisted. You see the result.

Like many regulatory unintended consequences, it’s hard for me to see an easy way back. But it’s more than an academic question if you are a director serving on a compensation committee.

Hayek and Business Management

Tuesday, April 28th, 2015

Arnold Kling cannot emphasize enough how much he agrees with this:

If extensive knowledge is possible, then bosses might be able to manage big companies well. If not, then centrally planned companies will be inefficient. Sure, perhaps competition will eventually weed out egregious incompetence, but market forces might not grind so finely as to eliminate all inefficiency.

Kling explains:

Because I spent 15 years in business, I got an opportunity to see large organizations close up. I saw that in a large business, the top management cannot keep track of more than about three major initiatives at a time. I saw that compensation systems have to be frequently overhauled, because employees learn to game any system that stays in place for more than a couple of years. I saw the “suits vs. geeks” divide, as specialists in information technology or financial modeling had difficulty communicating with executives who had only general knowledge.

The notion of large, efficient organization is an oxymoron. If you think that large corporations have overwhelming advantages, then you have explained why IBM still dominates the computer industry, while Microsoft and Apple never really got amounted to much of anything. I like to say that if you are afraid of large corporations then you have never worked for one.

Of course, large corporations do exist. That is because as clumsy as they are, they can still be less clumsy than the alternative, which is to break a corporation into a network of contractually related divisions.

How Much is the U.S. Worth?

Saturday, April 25th, 2015

All the land in the US is worth $23 Trillion:

That’s William Larson’s estimate for the value of the 1.89 billion acres of land that accounts for the 48 contiguous states and the District of Columbia. The dollar figure — equal to about 1.4 times last year’s gross domestic product – represents only the value of the land, and not buildings, roads or other improvements, and excludes bodies of water.

He also determined values for every state. California is worth the most at $3.9 trillion and Vermont is worth the least at a paltry $44 billion. On a per acre basis, New Jersey has the most valuable land at $196[,41o] an acre and Wyoming the least, $1[,557] an acre.

[...]

His estimates reflect the land’s value in 2009. Therefore it shows a post-recession figure (he says country’s value fell 24% from 2006 to 2009) and doesn’t account for the changes in value due to the shale-gas activity in the Midwest and elsewhere.

Some key findings:

  • The federal government owns 24% of all land, worth a collective $1.8 trillion. (That’s 8% of the country’s total value, or around 10% of the total outstanding federal debt.)
  • Just 5.8% of U.S. land is developed, but that land accounts for 50.7% of the total value.
  • Almost half, 47%, of U.S. land is used for agriculture.

A typical state is just 7 percent developed, with a land value of just $10[,000] per acre. D.C., on the other hand, is 87 percent developed, with a land value just over $1,000[,000] per acre.

Marijuana Taxes

Sunday, April 19th, 2015

Colorado’s marijuana tax collections are not as high as expected:

In February 2014, Gov. John Hickenlooper’s office projected Colorado would take in $118 million in taxes on recreational marijuana in its first full year after legalization. With seven months of revenue data in, his office has cut that projection and believes it will collect just $69 million through the end of the fiscal year in June, a miss of 42 percent.

That figure is consequential in two ways. First, it’s a wide miss. Second, compared with Colorado’s all-funds budget of $27 billion, neither $69 million nor $118 million is a large number.

There are lessons for other states:

Because of low public support for marijuana prohibition, many jurisdictions have intentionally lax enforcement around illegal marijuana markets. This often shows up as a wink-wink culture around medical access. (See, for example, “Medical Kush Doctor” signs that once adorned storefronts in Venice, Calif.) After legalization, that culture of lax enforcement can be a barrier to tax collection.

Another lesson is that marijuana taxes should be “specific excise” taxes per unit of intoxicant. In most states, cigarettes are taxed by the pack and alcohol by the liter. Marijuana could similarly be taxed by the gram (either of plant or of T.H.C.), which would protect states from revenue declines if pretax prices fall.

Taxes on intoxicants are meant to offset the negative social effects of intoxicant use; the size of those effects should not be expected to vary with market price.

But even if Colorado got all this right, improved revenues would not be among the most important effects that marijuana legalization has on the state.

“Tax revenue is nice to have, but in most states is not going to be enough to change the budget picture significantly,” Mr. Kleiman says. “The stakes in reducing criminal activity and incarceration and protecting public health are way higher than the stakes in generating revenue.”

What A Good Job Looks Like

Tuesday, April 14th, 2015

When Matthew B. Crawford graduated, he found that there was more demand for his services as an unlicensed electrician than as a credentialed physicist. He discusses what a good job looks like:

The work of electricians, plumbers and auto mechanics cannot be outsourced. That is reason enough for a young person to consider going into the trades. But let’s take a broader view of the matter and consider also the possibility for real satisfaction, which may or may not be present in the work we do. Human beings seem to be built in such a way that we want to see a direct effect of our actions in the world and feel that these actions are genuinely our own.

Consider the striking fact that when Henry Ford introduced the assembly line in 1913, most workers simply walked out. His biographer, Keith Sward, wrote, “So great was labor’s distaste for the new machine system that toward the close of 1913 every time the company wanted to add 100 men to its factory personnel, it was necessary to hire 963.”

Obviously, the men who walked out had other options. Early on, the automotive industry had recruited people from carriage shops and bicycle shops–all-around mechanics who took pride in their skill and knowledge. To merely pull the same lever over and over on an assembly line was stultifying, and insulting too. Eventually Ford raised wages enough to keep the line staffed, and people got used to it.

This story has a parallel in our own time. White-collar work too gets routinized and dumbed-down. This fact often gets obscured by the fact that you may need an academic credential to get the job. I went to graduate school in the early 1990s and loved every minute of it. With my new master’s degree, I landed a job as an “indexer and abstractor.” I was to write brief summaries of articles in scientific and other academic journals.

It sounded really challenging. But my quota, after 11 months on the job, was 28 articles per day. The only way to meet the quota was to stop thinking, and in fact I was given rules for writing these summaries that were based on the supposition that it could be done in a routinized, unthinking way. The job paid $23,000 a year. I never did get used to it.

As far back as 1942, Joseph Schumpeter wrote that the expansion of higher education beyond labor-market demand creates for white collar workers “employment in substandard work or at wages below those of the better-paid manual workers.” What’s more, “it may create unemployability of a particularly disconcerting type. The man who has gone through college or university easily becomes psychically unemployable in manual occupations without necessarily acquiring employability in, say, professional work.”

The current glut of college graduates, many of them with heavy debt loads, may need to overcome this problem of being “psychically” (not physically) unemployable in manual occupations, a disability acquired from sitting in classrooms from age 5 to age 22. I am happy to report that it is possible. After getting a Ph.D. from the University of Chicago, followed by another prestigious-sounding but soul-killing job at a think tank, I opened a motorcycle repair shop.

Motorcycles are made on assembly lines, but the work of fixing them isn’t too far removed from what those craftsmen in the bicycle and carriage shops were doing. There’s a lot of thinking involved, and it is always my own thinking. In fact, the work of diagnosing mechanical problems is often more intellectually challenging than my think tank job was. “Motorcycle mechanic” is a less prestigious answer to give at a cocktail party when someone asks what I do, but in saying it, I feel more genuine pride.

(He also wrote Shop Class as Soulcraft: An Inquiry into the Value of Work.)

The History of a Congo Road Built Using German Aid Money

Wednesday, April 8th, 2015

This history of a Congo road built using German aid money is quite depressing:

A part of it gets built and then the aid workers go elsewhere. Soon the first potholes form and the jungle begins to gnaw away at the shoulders of the road. Ultimately, it will disappear completely.

Welthungerhilfe is now building a section of road heading south from Lubutu and has committed to maintaining this new, flawless red-earthen highway until 2016. But what happens after that? Dörken hesitates. “Honestly, I wouldn’t dare to venture a guess.”

Originally, he and his colleagues had set up a system to maintain the road. They established “road committees” in the villages which then installed barriers to collect tolls. Revenues were to go toward maintenance work. The system worked well, Dörken says, but then the Congolese government in 2006 revoked Welthungerhilfe’s mandate for maintaining the road. Since then, tolls have continued to be collected, but the money is no longer reinvested in the road and it is slowly disintegrating as a result.

Isn’t that frustrating? “Yes, of course!” says Dörken, losing his ironic distance for an instant. Then, once again under control, he summarizes the entire problem with development aid in a single sentence: “We are waiting for the state to begin fulfilling its duties.”

Singapore After Lee Kuan Yew

Tuesday, April 7th, 2015

Perhaps the most critical aspect of Lee Kuan Yew’s success was meeting the requirements of multinational companies:

Designating English as the national language  was a primary advantage. Due largely to Lee, Singapore is a primarily English-speaking country, and global business tends to go where it is understood, and where its nationals can most easily function.

As a result, efficient, globally focused Singapore now boasts more than twice as many regional headquarters of foreign firms than far-larger Tokyo, not to mention Asia’s less affluent megacities. They provide expats working for multinationals with sanitation, parks, trees, clean housing, an educated workforce, and low corruption not readily available in the rest of south Asia. Anyone who has spent time in India, or even Vietnam, marvels at the relative ease of life in Singapore.

Singapore may be in spiritual crisis though:

The fertility rates in Singapore have fallen almost 50 percent below the replacement rate of 2.1. Overall, Singapore-based demographer Gavin Jones estimates that up to a quarter of all East Asian women now entering their 20s — including those in Singapore — will still be single by age 50, and up to a third will remain childless.

“People increasingly see marriage and children as very risky, so they avoid it,” notes Singapore based demographer Gavin Jones. “Even though there’s a strong ideology in Asia to have a family, it is fading.”

Jones and others see this trend as something of a spiritual crisis, coupled with high housing prices and an overemphasis on work. In the old Chinese world, children were seen as essential to economic stability and social status. Now those values have drowned in a tsunami of materialism and global culture.

[...]

The tendency to put off marriage and child-bearing, as well as the focus on material gain, works against the fundamental values of patience and persistence that animated Lee Kuan Yew’s career, and also shaped Chinese civilization. A society that is increasingly single and childless is likely to be more concerned with serving current needs than addressing the future.

Tell Me How This Ends Well

Tuesday, April 7th, 2015

Thomas Friedman doesn’t dig deep, but he gets this mostly right:

Asian autocrats tended to be modernizers, like Singapore’s Lee Kuan Yew, who just died last week at 91 — and you see the results today: Singaporeans waiting in line for 10 hours to pay last respects to a man who vaulted them from nothing into the global middle class. Arab autocrats tended to be predators who used the conflict with Israel as a shiny object to distract their people from their own misgovernance. The result: Libya, Yemen, Syria and Iraq are now human development disaster areas.

How the Easter Bunny Got So Soft

Sunday, April 5th, 2015

The price of plush Easter bunnies hasn’t changed since 1970 — the nominal price, that is, meaning they’re much, much cheaper in real terms — yet they’re much softer and higher quality:

“It’s a better product than it was years ago, and it’s not that much more expensive,” said Steven Meyer, the third-generation owner of Mary Meyer Corp., a toy company based in Vermont. Meyer joined the company in 1986, helping his father weather the tough transition to manufacturing in Korea. (“I grew up literally with a stuffed toy factory in the backyard,” he recalled. “It was 30 feet behind our home.”)

For example, Meyer explained that Korean and Taiwanese toymakers introduced safety procedures, later copied in China, to assure that toddlers’ bedtime companions didn’t contain hidden hazards. “Every one of our toys is put through a metal detector before it goes into a box, and that’s because a little shard of a sewing needle can break off and go into the toy,” said Meyer. “We never thought of that when we produced in the United States.”

More immediately apparent is how the toys feel. A stuffed animal that would have delighted a late baby boomer like me now seems rigid and rough. Today’s toys are stuffed with soft, fibrous polyester rather than the foam rubber, sawdust or ground nut shells of the past. That makes them squishier, as do plush outer fabrics that no longer have stiff backings; the yarns are knitted to one another rather than attached to a rigid fabric like a carpet. As a result, said Meyer, “The whole stuffed toy feels softer and slouchier.”

[...]

The secret to both wickable T-shirts and softer Easter bunnies lies in polyester microfibers. These high-tech textiles have replaced the acrylic and polyester plushes that used to cover stuffed toys as surely as they’ve nudged aside cotton for exercise apparel. They represent a remarkable technical and cultural achievement.

In the immediate post-disco era polyester was the epitome of textile yuckiness — synonymous with the cheap, uncomfortable and out of style. “Pity poor polyester. People pick on it,” wrote Wall Street Journal reporter Ronald Alsop in a front-page 1982 article chronicling manufacturers’ attempts to rehabilitate the fiber’s image. What brought polyester back into fashion wasn’t marketing but years of innovation, with textile engineers on three continents making extraordinary gains in producing ever-finer fibers.

Textile fibers, including polyester filaments, are measured in decitex or deniers, almost equivalent units unique to the business. For reference: Silk measures about 1.1 to 1.3 decitex, while human hair runs between 30 and 50. A microfiber is defined as anything less than 1 decitex.

Although polyester microfibers date back to Toray Industries Inc.’s development of Ultrasuede in 1970, they have only become widespread in recent years, thanks in part to massive plant investments in China that have swamped the polyester market and driven down prices. Back around the time that I was buying stuffed toys for my nephew, polyester fibers of around 3 decitex still “were considered fine,” said Frank Horn, president of the Fiber Economics Bureau, the statistical collection and publication arm of the American Fiber Manufacturers Association. But over the past decade or so, true microfibers have “become ubiquitous.”

Now, Horn estimated, the average is about 0.5 decitex — a reduction of about 85 percent — and some popular microfibers are as fine as 0.3 decitex. The finer the fiber, the softer the final fabric. That’s what makes today’s stuffed animals so extraordinarily silky.

Truly Nuts

Tuesday, March 31st, 2015

We’re spending thousands of dollars of water to grow hundreds of dollars of almonds, Alex Tabarrok notes — and that is truly nuts:

As you may have noticed at the grocery store, almonds are in demand right now whether raw or in almond milk. Asian demand for almonds is also up. As a result, in the last 10 years almond production in California has doubled. That’s great, except for the fact that almond production uses a huge amount of water and water in CA is severely mispriced and thus misallocated. [...] More water is used in almond production than is used by all the residents and businesses of San Francisco and Los Angeles combined. Here’s a chart from Mother Jones:

Water Misallocation in California