Isegoria

Is recycling useful, Michael Munger asks, or is it garbage?

And “recycling” is, after all, not just one homogeneous activity, but a whole collection of possible streams of waste or resources, each of which has to be evaluated separately. Should we recycle aluminum cans? Probably, because the price of recycling aluminum compares very favorably to using virgin materials, the mining and smelting of which are expensive in terms of energy and harmful to the environment.

Should we recycle toilet paper? We could, at some price. But it’s likely not worth it, because it can be composted, it would be awfully hard to clean and sort, and in any case paper products are actually a renewable resource, rather like wheat. You rarely hear someone saying, “Save the wheat! Give up bread!” But that kind of argument is often made for paper, even though the trees grown to produce pulp are simply a fast-growing crop grown on farms expressly for that purpose.

For recycling to be a socially commendable activity, it has to pass one of two tests: the profit test, or the net environmental-savings test. If something passes the profit test, it’s likely already being done. People are already recycling gold or other commodities from the waste stream, if the costs of doing so are less than the amount for which the resource can be sold.

Voluntary “recycling” like scrap iron or aluminum businesses will take care of that on their own. The real question arises with mandatory recycling programs — people recycle because they will be fined if they don’t, not because they expect to make money—or “voluntary” recycling programs such as those at universities or other communities where failure to recycle earns you public shaming.

For coercive or social-pressure recycling to make sense, three things have to be true.

1. Scale. You need substantial amounts of the “input,” or garbage. Hauling small amounts is wasteful. Many suburban neighborhoods in the U.S. have small amounts of recycling out by the curb, and fossil fuel–powered trucks come by spewing greenhouse gases. Part of the reason wheat and pork bellies are valuable is that the average costs of transport and handling are low, because the scale is so large. I once watched a young woman in Vitacura, Chile, wait in line in her idling auto for more than 10 minutes so she could park and put two two-liter plastic bottles into a recycle bin. That’s not economics, that’s a religious ceremony. Without scale, most recycling harms the environment.

2. Convenience. There is one resource we can’t get more of: time. Our lives pass quickly, and we have many things to do. But we are asked to donate our time to recycling, to “save” resources. We are asked to wash out and clean the stuff (I actually know people who run their garbage through the dishwasher, so it will be clean. Think of the time, coal-produced electricity, and hot water that uses.) Then we are supposed to sort the garbage and deliver it to the recycling facility.

Why isn’t this done at the recycling facility? Because the government realizes (correctly) it is too expensive, and the costs would swamp the tiny savings, if there are any, in doing recycling in the first place. But if the costs of cleaning and sorting are too great at scale, with commercial resources, why isn’t the sum of the individual costs of cleaning and sorting, in each household, even greater?

If you add up the time being wasted on recycling rituals, it’s even more expensive to ask each household to do it. The difference is that this is an implicit tax, a donation required of citizens, and doesn’t cost money from the public budget. But time is the least renewable of all resources; demanding that it be donated to a pointless or even harmful ritual such as recycling glass is government malpractice.

3. Environmental savings. For recycling to make any sense, it must cost less to dispose of recycled material than to put the stuff in a landfill. But we have plenty of landfill space, in most of the country. And much of the heaviest material we want to recycle, particularly glass, is chemically inert and will not decompose in a landfill.

Ground “recycled” glass, or “cullet,” is less useful than the virgin silica sand from which glass is made. Cullet has impurities and chemical colorings that make it difficult to use for glass without further processing. To be clear, then: landfilling glass does no environmental harm, and the glass is more expensive than the virgin material it is supposed to replace. Further, glass is heavy, and carting it to distant processing centers, in any but the most urban areas, pollutes the air.

So, is recycling useful? As I said at the outset, for some things it is. Aluminum cans and corrugated cardboard, if they can be collected clean and at scale, are highly recyclable. I myself, on finding an aluminum can in the garbage, will generally take it out and try to find a recycle bin. It seems dumb to waste the aluminum, even though the value of the aluminum in one can is less than 2 cents.

But for most other things, recycling harms the environment. I’m not (just) saying it’s costly. I’m saying recycling is harmful. If you care about the environment, you should put your bottles and other glass in the regular garbage, every time.

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Once you begin to think of recycling as a symbol of religious devotion rather than a pragmatic solution to environmental problems, the whole thing makes more sense.

As in any religious ceremony, the whole point is sacrifice: Abraham was ready to slay Isaac; Catholics give up meat during Lent; Muslims fast all day during Ramadan. And a young woman in Chile with two two-liter bottles sits in her car in line, knowing she is publicly visible and that her green moral virtue is apparent to everyone.

The theory of market failure is a reproach to the free-market economy, but, Bryan Caplan notes, it’s also a reproach to every existing government:

How so? Because market failure theory recommends specific government policies — and actually-existing governments rarely adopt anything like them.

What do I have in mind?

1. When markets produce too much of something, market failure theory tells governments to impose corrective taxes that correspond to the severity of the excess — then let people do as they please. In the real world, in contrast, governments normally pass a phone book’s worth of regulations. They rarely consider the cost of the regulations, and almost never just let people bypass regulations by paying a high fee. Thus, you can’t buy your way out of an Environmental Impact Statement or heroin prohibition — and if the theory of market failure is right, this rigidity is deeply dysfunctional.

2. When markets produce too little of something, market failure theory tells governments to provide corrective subsidies that correspond to the severity of the shortfall — then let people do as they please. In the real world, in contrast, governments tend to directly run industries with alleged positive externalities. Public education and health care are the obvious example, but the same goes for national parks, government lands, etc. Furthermore, government firms routinely offer even non-rival products for gratis or next-to-gratis — even when the products have clear negative externalities such as road congestion and subsidized energy.

3. While the theory of market failure abhors monopoly, actually-existing governments do much to stifle competition. This is most grotesque for real estate and immigration, which most governments view with dire suspicion, but perhaps most blatant for occupational licensing. Again, if negative externalities were the real rationale for these restrictions, governments would just impose taxes — then let everyone build, move, and work as they please.

Does burning your money make you poor?

Almost everyone responds, “Obviously.”  And in a sense, it is obvious.  If you take all your money and burn it, you’ll be hungry and homeless as a result.  QED.

In another sense, though, burning money might not change a thing.  How so?  Suppose if you don’t burn your money, you flush it down the toilet instead.  Empirical researchers who look will detect zero effect of burning money on your standard of living.  Why?  Because your Plan B is just as impoverishing as your Plan A.

As far as I know, no researcher bothers to study the connection between burning cash and living in poverty.  But researchers do study analogous issues, like: Does becoming a single mother lead to poverty?  At least according to some studies, once you adjust for preexisting characteristics, women who have kids out of wedlock are no poorer than women who don’t.

How is this even possible?  You have to think about what single moms would have done if they hadn’t gotten pregnant.  Maybe they would have just spent more time hanging out with irresponsible boyfriends and partying.  If so, researchers will detect no effect of single motherhood on poverty.

There’s nothing literally wrong with this result, but it is easily misinterpreted.  Key point: Most people who affirm that “Single motherhood causes poverty” tacitly assume a more elaborate counter-factual.  Something like: “Continuously working full-time without getting pregnant.”  And if that’s the counter-factual, “Single motherhood causes poverty” is almost as undeniable as “Burning money makes you poor.”  Empirical research can and occasionally does disprove common sense.  But more often empirical research just addresses a different but superficially similar question.

Razib Khan discusses the emergence of a cosmopolitan class in th 19th-century Europe — in part to emphasize that it was not purely a matter of Jewish assimilation:

The great families of Europe which came to dominate the polities of the continent after the fall of the Roman Empire were not tied to one particular national identity or ethnicity. The Anglo-Norman kings famously spoke French, and many of them lacked facility with English. Meanwhile, the mother of the king of France was from Kiev, and, and half Russian and half Swedish. Queen Elizabeth’s family consciously shed their German affinities in the early 20th-century, while her husband’s family had the throne of Greece for several decades, though apparently, he considers himself “more Danish” than anything else.

In the Islamic world for centuries Egypt was ruled by a separate caste of Turks and Circassians, the Mamelukes, even after the Ottoman conquest. The famous Safavid dynasty, which converted Iran to Shia Islam in the 16th-century, was Azeri Turk in language, but their ancestry seems to have been a recent mix of Kurd, Turk, and Pontic Greek. And let’s not forget India, where Turkic and Afghan Muslims ruled vast swaths of the subcontinent for centuries.

The period between 1815 and the present is unique in the supremacy of a particular national idea. It also coincides with the high tide of European dominance in the world. The world is going through economic and cultural rebalancing, but we don’t have the language or the expectations to understand this. The current age is one of globalization, though not necessarily any greater than the decades around 1900. But that was a more limited, European world, with the emergence of a trans-Atlantic elite (remember Winston Churchill’s mother was American). Today we have an international class of people with passports from specific nations, but global affinities. I do have friends who express more fellow-feeling and comfort with upper-middle-class elements in Dubai, London, and Singapore, than with their own fellow citizens in the hinterlands. This is partly a function of the importance of travel to the new sub-elite. And yet in the United States, 64 percent of people do not have a valid passport.

The reality is that people with passports are not going away. And the people without passports are not going away. Both of these groups have to accommodate the contingent historical reality that Westphalian nation-states exist, and we aren’t going to instantaneously create a new political arrangement which can conveniently integrate both groups. The problem with the nature of elite media, academia, and cultural and economic productivity producers is that passport holders dominate these sectors. In the 1990s this led to a delusion that the nation-state would dissolve in substance, if not de jure, just like the state boundaries in the USA are basically administrative realities.

That’s not happening. And the non-passport holding class has been negatively affected in various ways by the efficiencies of globalization, in some ways in absolute terms, but definitely in positional terms. Mainstream parties of the Left and Right, being of the passport holding class, hoped that these consequences would not be extreme. But they have been extreme. And the late 2000s financial crisis undermined what credibility the elite among the passport holding class did have.

At some point, the passport holders need to put neoclassical economic textbooks to the side and accept that there are non-economic variables which generate social cohesion and positive externalities, which allow for prosperity. And the acidic impact of globalization is eroding those factors across the developed world, resulting in the rise of populism.

But just as the medieval Catholic commonwealth is not coming back, the national systems of 1950 are not coming back. The current wave of populists is in denial, and refuses to engage with the global oligarchy’s existence, along with the much larger sub-elite of the new class global upper-middle-class. At some point, a reckoning will occur because the passport holders pay a disproportionate amount of the taxes.

What we need to see in the next few decades is a dialogue, and synthesis, between global cosmopolitanism and regional nationalism. The very forces of global efficiency have now shown us that the gains to trade and integration are not equally distributed, and the non-passport holding class, the populist voter, will never join the universal global class. But neither is the second era of globalization going to end as the first did. We are simply too integrated, and travel and communication are too easy.

On Bretton Woods’ 75th Anniversary, Tyler Cowen reminds us that every era’s monetary institutions are virtually unimaginable until they are created:

Every era’s monetary institutions are virtually unimaginable until they are created. Looking forward, don’t assume the status quo will hold forever, but rather prepare to be shocked.

Consider the broader history of monetary and financial institutions. The gold standard (and sometimes bi-metallic) regime that marked the Western world from 1815-1914 was without precedent. In medieval times, gold, silver, copper and bills of exchange — from multiple issuers — all circulated as means of payment, and often there was no single dominant form of money. As the gold standard evolved, however, claims to gold became a global means of settling claims and easing foreign trade and investment. While the system was based on some central bank intervention, most notably from the Bank of England, it was self-regulating to a remarkable degree, and it formed the backbone of one of the West’s most successful eras of economic growth. It was not obvious that the West would arrive at such a felicitous arrangement.Now fast forward to the current day. Currencies are fiat, the ties to gold are gone, and most exchange rates for the major currencies are freely floating, with periodic central bank intervention to manipulate exchange rates. For all the criticism it receives, this arrangement has also proved to be a viable global monetary order, and it has been accompanied by an excellent overall record for global growth.

Yet this fiat monetary order might also have seemed, to previous generations of economists, unlikely to succeed. Fiat currencies were associated with the assignat hyperinflations of the French Revolution, the floating exchange rates and competitive devaluations of the 1920s were not a success, and it was hardly obvious that most of the world’s major central banks would pursue inflation targets of below 2%. Until recent times, the record of floating fiat currencies was mostly disastrous.

It is considered bizarre that former Fed Chairman Alan Greenspan advocated a gold standard in 1967, but in fact it was a pretty reasonable view at the time, even if it turned out to be incorrect. And it wasn’t just Greenspan who didn’t see where the world was heading; Benn Steil, in his well-known book on Bretton Woods, wrote: “Keynes thought of freely floating rates as a sort of blind groping … and certainly not as a viable alternative model for underpinning trade relations among nations.” In reality, we are just emerging from arguably the world’s most rapid age of globalization, from about 1990 to 2007.

The Bretton Woods arrangements also seemed highly unlikely until they were in place. They involved a complicated system of exchange rate pegs, capital controls and a “gold pool” (and other methods) to control gold prices and redemption ratios. What’s more, the whole thing was dependent on America’s role as global hegemon, both politically and economically. The dollar still was tied to gold, and the other major currencies tied to the dollar, but as the system evolved it required that no one was too keen to redeem dollars for gold (the French unwillingness to abide by this stricture was one proximate cause of the collapse of Bretton Woods).

I don’t think a monetary economist from, say, 1890 could have imagined that such an arrangement would prove possible, much less successful. Yet the Bretton Woods arrangements had a wonderful track record, as the 1950s and 1960s generated strong economic growth for both the U.S. and Western Europe.

At the same time, once Bretton Woods ended in the early 1970s, few people thought it was possible to turn back the clock. The system required the U.S. to be a creditor nation, to hold much of the world’s gold stock, and for countries such as France to defer to American wishes on gold convertibility. Once again, the line between an “imaginable” and “unimaginable” monetary arrangement proved to be a thin one.

Another surprising monetary innovation would be the euro. Both Milton Friedman and Paul Krugman warned that the euro was unlikely to succeed and persist. Yet it has proven more durable than many people expected, and there does not seem to be an end in sight. This kind of a common fiat currency, spread across so many nations, is without precedent in world history.

So as you consider the legacy of Bretton Woods this week, remember that core lesson: There will be major changes in monetary and institutional arrangements that no one can even imagine right now. Assume the permanency of the status quo at your peril.

Bryan Caplan just returned from Spain:

The quickest way to explain Spain to an American: Spain is the California of Europe.  I grew up in Los Angeles, and often found myself looking around and thinking, “This could easily be California.”  The parallel is most obvious for geography — the deserts, the mountains, the coasts.  But it’s also true architecturally; the typical building in Madrid looks like it was built in California in 1975.  And at least in summer, the climates of Spain and California match closely.  Spain’s left-wing politics would also resonate with Californians, but Spain doesn’t seem very leftist by European standards.  Indeed, Spaniards often told me that their parents remain staunch Franco supporters.

He shares some reflections:

1. Overall, Spain was richer and more functional than I expected. The grocery stores are very well-stocked; the worst grocery store I saw in Spain offered higher quality, more variety, and lower prices than the best grocery store I saw in Denmark, Sweden, or Norway. Restaurants are cheap, even in the tourist areas. Almost all workers I encountered did their jobs with a friendly and professional attitude. There is near-zero violent crime, though many locals warned us about pickpockets.

2. The biggest surprise was the low level of English knowledge of the population. Even in tourist areas, most people spoke virtually no English. Without my sons, I would have been reduced to pantomiming (or Google translate) many times a day. Movie theaters were nevertheless full of undubbed Hollywood movies, and signs in (broken) English were omnipresent.

3. I wasn’t surprised by the high level of immigration, but I was shocked by its distribution. While there are many migrants from Spanish America, no single country has sent more than 15% of Spain’s migrants! The biggest source country, to my surprise, is Romania; my wife chatted with fellow Romanians on a near-daily basis. I was puzzled until a Romanian Uber driver told me that a Romanian can attain near-fluent Spanish in 3-4 months. Morocco comes in at #2, but Muslims are less visible in Madrid than in any other European capital I’ve visited.

4. 75% of our Uber drivers were immigrants, so we heard many tales of the immigrant experience. Romanians aside, we had drivers from Venezuela, Peru, Ecuador, Colombia, and Pakistan. Even the Pakistanis seemed highly assimilated and almost overjoyed to reside in Spain. By the way, Uber in Spain works even better than in the U.S. The median wait time was 3 minutes, and the prices were about one-third less than in the U.S.

5. Refugees from Chavismo were prominent and vocal. One Venezuelan Uber driver was vocally pro-Trump. You might credit Trump’s opposition to Maduro, but the driver said she liked him because “He doesn’t talk like a regular politician.” I wanted to ask, “Couldn’t you say the same about Chavez and Maduro?!” but I was in listening mode.

6. I’ve long been dumbfounded by Spain’s high unemployment rate, which peaked at around 27% during the Great Recession and currently stands at about 15%. Could labor market regulation really be so much worse in Spain than in France or Italy? My chats with local economists — and observation of the labor market — confirmed my skepticism. According to these sources, a lot of officially “unemployed” workers are lying to collect unemployment insurance while they work in the black market.

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7. If I didn’t know the history of the Spanish Civil War, I never would have guessed that Spain ever had a militant labor movement. Tipping was even rarer than in France, but sincere devotion to customer service seems higher than in the U.S. Perhaps my sons charmed them with their high-brow Spanish, but I doubt that explains more than a small share of what I saw. A rental car worker apologized for charging me for returning my car with a 95% full tank, adding, “Sorry, but my boss will yell at me if I don’t.”

8. Catalan independence is a weighty issue for both Barcelona and Madrid libertarians. Madrid libertarians say that an independent Catalonia would be very socialist; Barcelona libertarians say the opposite. I found the madrileños slightly more compelling here, but thought both groups were wasting time on this distraction. Libertarians around the world should downplay identity and focus on the policy trinity of deregulating immigration, employment, and housing. (Plus austerity, of course).

9. UFM Madrid Director Gonzalo Melián was originally an architect. We discussed Spanish housing regulation at length, and I walked away thinking that Spain is strangling construction about as severely as the U.S. does.

10. Spanish housing regulation is especially crazy, however, because the country is unbelievably empty. You can see vast unused lands even ten miles from Madrid. The train trip to Barcelona passes through hundreds of miles of desert. Yes, the U.S. has even lower population density, but Spain is empty even in regions where many millions of people would plausibly like to live. Indeed, population density in Spain is actually lower than in the contiguous U.S.

Naturally, Caplan thinks that Spain needs more immigrants:

12. My biggest epiphany: Spain has more to gain from immigration than virtually any other country on Earth. There are almost 500 million native Spanish speakers on Earth — and only 47 million people in Spain. (Never mind all those non-Spanish speakers who can acquire fluency in less than a year!) Nearly all of these Spanish speakers live in countries that are markedly poorer and more dangerous than Spain, so vast numbers would love to migrate. And due to the low linguistic and cultural barriers, the migrants are ready to hit the ground running. You can already see migration-fueled growth all over Spain, but that’s only a small fraction of Spain’s potential.

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14. How can immigration to Spain be such a free lunch? Simple: Expanding a well-functioning economy is far easier than fixing a poorly-functioning economy. The Romanian economy, for example, has low productivity. Romanian people, however, produce far more in Spain than at home. Give them four months to learn the language, and they’re ready to roll.

15. According to my sources, Spain’s immigration laws stubbornly willfully defy this economic logic. When illegal migrants register with the government, they immediately become eligible for many government benefits. Before migrants can legally work, however, they must wait three years. Unsurprisingly, then, you see many people who look like illegal immigrants working informally on the streets, peddling bottled water, sunglasses, purses, and the like. I met one family that was sponsoring Venezuelan refugees. Without their sponsorship, the refugees would basically be held as prisoners in a government camp — or even get deported to Venezuela. Why not flip these policies, so migrants can work immediately, but wait three years to become eligible for government benefits? Who really thinks that people have a right to the labor of others, but no right to labor themselves?

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Where is the Texas of Spain? I don’t know, but that’s where the future is.

A new federal program in the 1980s offered farmers money to reforest depleted land:

Pine trees appealed to Mr. George. He bought loblolly seedlings and pulled his pickup into a parking lot where hands-for-hire congregated.

“We figured we’d plant trees and come back and harvest it in 30 years and in the meantime go into town to make a living doing something else,” he said.

Three decades later the trees are ready to cut, and Mr. George is learning how many other Southerners had the same idea.

A glut of timber has piled up in the Southeast. There are far more ready-to-cut trees than the region’s mills can saw or pulp. The surfeit has crushed timber prices in Mississippi, Alabama and several other states.

The volume of Southern yellow pine, used in housing and to make paper, has surged in recent decades as farmers replaced cropland with trees and as clear-cut forests were replanted. By 2020, the amount of wood growing per acre of timberland in many counties will have more than quadrupled since 1980, U.S. forestry officials estimate.

It has been a big loser for some financial investors, among them the country’s largest pension fund. The California Public Employees’ Retirement System spent more than $2 billion on Southern timberland, and harvested trees at depressed prices to pay interest on money borrowed to buy. Calpers sold much of its land this summer at a loss. A spokeswoman for the pension fund declined to comment.

It has also been tough for the individuals and families who own much of the South’s forestland, and who had banked on its operating as a college fund or retirement account. The region has more than six million owners of at least 10 wooded acres, say academics and forestry consultants. Many of the owners were counting on forests as a long-term investment that could be replenished and passed on to heirs.

Naturally Jared Diamond (Upheaval) is concerned about the environment — and about the rest of the world trying to live like us:

The most discussed primary effect of CO2 release is to act as a so-called greenhouse gas in the atmosphere. That’s because atmospheric CO2 is transparent to the sun’s shortwave radiation, allowing incoming sunlight to pass through the atmosphere and warm the Earth’s surface. The Earth re-radiates that energy back towards space, but at longer thermal infrared wavelengths to which CO2 is opaque. Hence the CO2 absorbs that re-radiated energy and re-emits it in all directions, including back down to the Earth’s surface.

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But there are two other primary effects of CO2 release. One is that the CO2 that we produce also gets stored in the oceans as carbonic acid. But the ocean’s acidity is already higher than at any time in the last 15 million years. That dissolves the skeletons of coral, killing coral reefs, which are a major breeding nursery of the ocean’s fish, and which protect tropical and subtropical sea-coasts against storm waves and tsunamis. At present, the world’s coral reefs are contracting by 1% or 2% per year, so they will mostly be gone within this century, and that means big declines in tropical coastal safety and protein availability from seafood.

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For instance, when non-poisonous chlorofluorocarbon gases (CFCs) replaced the poisonous gases previously used in refrigerators until the 1940’s, it seemed like a wonderful and safe engineering solution to the refrigerator gas problem, especially because laboratory testing had revealed no downside to CFCs. Unfortunately, lab tests couldn’t reveal how CFCs, once they got into the atmosphere, would begin to destroy the ozone layer that protects us from ultraviolet radiation.

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France has generated most of its national electricity requirements from nuclear reactors for many decades without an accident.

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Europeans are discouraged from buying expensive big cars with high fuel consumption and low gas mileage, because the purchase tax on cars in some European countries is set at 100%, doubling the cost of the car.

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Also, European government taxes on gasoline drive gas prices to more than $9 per gallon, another disincentive to buying a fuel-inefficient car.

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These various resources differ in four respects important for understanding their potential for creating problems for us: their renewability, and the resulting management problems; their potential for limiting human societies; their international dimensions; and the international competition that they provoke, including wars.

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There have already been some attempts to exploit all three: after World War One the German chemist Fritz Haber worked on a process to extract gold from ocean water; at least one attempt has been made to tow an iceberg from Antarctica to a water-poor Middle Eastern nation; and efforts are far advanced to mine some minerals from the ocean floor.

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Fresh water is also mobile: many rivers flow between two or more countries, and many lakes are bordered by two or more countries, hence one country can draw down or pollute fresh water that another country wants to use.

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Average per-capita consumption rates of resources like oil and metals, and average per-capita production rates of wastes like plastics and greenhouse gases, are about 32 times higher in the First World than in the developing world.

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The First World consists of about 1 billion people who live mostly in North America, Europe, Japan, and Australia, and who have relative average per-capita consumption rates of 32.

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Many decades ago, American diplomats used to play a game of debating which of the world’s countries were most irrelevant to U.S. national interests. Popular answers were “Afghanistan” and “Somalia”: those two countries were so poor, and so remote, that it seemed that they could never do anything to create problems for us.

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Among the ways in which globalization has made differences in living standards around the world untenable, three stand out. One is the spread of emerging diseases from poor remote countries to rich countries.

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Many people in poor countries get frustrated and angry when they become aware of the comfortable lifestyles available elsewhere in the world. Some of them become terrorists, and many others who aren’t terrorists themselves tolerate or support terrorists.

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Only in poor countries, where much of the population does feel desperate and angry, is there toleration or support for terrorists.

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They have two ways of achieving it. First, governments of developing countries consider an increase in living standards, including consumption rates, as a prime goal of national policy. Second, tens of millions of people in the developing world are unwilling to wait to see whether their government can deliver high living standards within their lifetime. Instead, they seek the First World lifestyle now, by emigrating to the First World, with or without permission: especially by emigrating to Western Europe and the U.S., and also to Australia; and especially from Africa and parts of Asia, and also from Central and South America. It’s proving impossible to keep out the immigrants.

Jared Diamond argues (in Upheaval) that the US is facing its own crisis — but first a geography lesson:

The reason for the U.S.’s large population is its large area of fertile land. The only two larger countries, Russia and Canada, have much lower populations, because a large fraction of their area is Arctic, suitable only for sparse habitation and no agriculture.

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The reason for this apparent contradiction is that the U.S. is resource-rich, self-sufficient in food and most raw materials, and large in area, and has a population density less than 1/10th of Japan’s.

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The only countries in the world with per-capita GDPs or incomes higher than the U.S.’s are either small (populations of just 2–9 million: Kuwait, Norway, Qatar, Singapore, Switzerland, and the United Arab Emirates) or tiny (populations of 30,000–500,000: Brunei, Liechtenstein, Luxembourg, and San Marino).

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Their wealth comes mainly from oil or finance, whose earnings are spread over few people, resulting in high GDP or income per person but a low rank in total national economic output (which equals output per person times population).

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As regards geography, we are fortunate to be endowed with excellent real estate. The U.S.’s lower 48 states lie entirely within the temperate zones, which are the world’s most productive zone for agriculture, and the safest from the perspective of public health.

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Thus, North America’s wedge shape and history of repeated past glaciations, combined with the moderate rainfall prevailing over most of the continent today, are the underlying reasons why the U.S. has high agricultural productivity and is the world’s largest exporter of food.

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The other major geographic advantage of the U.S. is our waterways, both coastal and interior. They constitute a big money-saver, because transport by sea is 10–30 times cheaper than transport overland by road or by rail.

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Once barriers to navigation on those rivers had been engineered out of existence by construction of canals and locks, ships could sail 1,200 miles into the interior of the central U.S. from the Gulf Coast (Plate 9.4).

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When one adds the intra-coastal waterway to the Mississippi / Great Lakes system, the U.S. ends up with more navigable internal waterways than all the rest of the world combined.

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The other advantage of our sea-coasts is as protection against invasion.

Jared Diamond argues (in Upheaval) that modern Japan is facing a crisis, of sorts:

Japan today has the world’s third-largest economy, only recently overtaken by China’s.

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Japan’s national output is high both because Japan has a large population (second only to that of the United States among rich democracies) and because it has high average individual productivity.

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In relative terms, Japan’s proportion of its gross domestic product (abbreviated GDP) that it devotes to R & D, 3.5%, is nearly double that of the U.S. (only 1.8%), and still considerably higher than that of two other countries known for their R & D investments, Germany (2.9%) and China (2.0%).

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Japanese life expectancy is the highest in the world: 80 years for men, 86 for women.

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Japan is the world’s third-most egalitarian nation in its distribution of income, behind only Denmark and Sweden.

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Literacy and attained educational levels in Japan are close to the highest in the world.

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As foreign visitors to Japan quickly notice, its capital Tokyo rivals Singapore as the cleanest city in Asia, and is one of the cleanest in the world.

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(Interpretative texts at Japanese archaeological sites sometimes proudly point out site evidence for Japanese cleanliness already in ancient times.)

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Visitors also notice the safety and low crime rates of Japanese cities.

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Ethnic tensions are low compared to the U.S. and Europe, because of Japan’s ethnic homogeneity and very small ethnic minorities.

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Japanese agricultural productivity is high because of Japan’s combination of temperate climate, freedom from tropical agricultural pests, high rainfall concentrated in the summer growing season, and fertile volcanic soils.

[...]

As a result of all those environmental advantages, Japan was unusual in the ancient world in that, already at least 10,000 years before the adoption of agriculture, Japanese hunter-gatherers had settled down in villages and made pottery, rather than living as nomads with few material possessions.

[...]

Until Japan’s population explosion within the last century-and-a-half, Japan was self-sufficient in food.

[...]

The debt is currently about 2.5 times Japan’s annual GDP, i.e., the value of everything produced in Japan in one year.

[...]

First, most of the debt is not owed to foreign creditors, but to bond-holding Japanese individuals, Japanese businesses and pension funds (many of them owned by the government itself), and the Bank of Japan, none of which play tough with the Japanese government.

[...]

Despite all the debt that the Japanese government owes to Japanese themselves, Japan is a net creditor nation for other countries, which owe money to Japan.

[...]

Second, interest rates in Japan are kept low (below 1%) by government policy, in order to keep a lid on government interest payments.

[...]

Finally, Japanese as well as foreign creditors still have so much confidence in the government’s ability to pay that they continue to buy government bonds.

[...]

The other fundamental problems most often acknowledged by Japanese people themselves are the four linked issues of women’s roles, Japan’s low and declining birth rate, its declining population size, and its aging population.

[...]

Whereas women account for 49% of Japanese university students and 45% of entry-level job holders, they account for only 14% of university faculty positions (versus 33%–44% in the U.S., United Kingdom, Germany, and France), 11% of middle-level to senior management positions, 2% of positions on boards of directors, 1% of business executive committee members, and less than 1% of CEOs.

[...]

Work obstacles for women include the long work hours, the expectation of post-work employee socializing, and the problem of who will take care of the children if a working mother is expected to stay out socializing, and if her husband is also unavailable or unwilling.

[...]

Instead, 70% of Japanese working women quit work upon the birth of their first child, and most of them don’t return to work for many years, if ever.

[...]

Little child care is available to Japanese working mothers because of the lack of immigrant women to do private child care (see below), and because there are so few private or government child-care centers, unlike the situation in the U.S. and in Scandinavia, respectively.

[...]

Low and dropping birth rates prevail throughout the First World. But Japan has nearly the world’s lowest birth rate: 7 births per year per 1,000 people, compared to 13 in the U.S., 19 averaged over the whole world, and more than 40 in some African countries.

[...]

For the whole world that number averages 2.5 babies; for the First World countries with the biggest economies, it varies between 1.3 and 2.0 babies (e.g., 1.9 for the U.S.). The number for Japan is only 1.27 babies, at the low end of the spectrum; South Korea and Poland are among the few countries with lower values.

[...]

Part of the reason for Japan’s falling birth rate is that Japan’s age of first marriage has been rising: it’s now around 30 for both men and women.

[...]

A bigger reason for the falling birth rate is that the rate of marriage itself (i.e., the number of marriages per 1,000 people per year) is falling rapidly in Japan. One might object that the marriage rate is also falling in most other developed countries without causing the catastrophic drop in the birth rate that Japan is experiencing, because so many births are to unwed mothers: 40% of all births in the U.S., 50% in France, and 66% in Iceland. But that mitigation doesn’t apply to Japan, where unwed mothers account for a negligible proportion of births: only 2%.

[...]

Japan is already the country with the world’s highest life expectancy (84, compared to 77 for the U.S. and just 40–45 for many African countries), and with the highest percentage of old people. Already now, 23% of Japan’s population is over 65, and 6% is over 80. By the year 2050 those numbers are projected to be nearly 40% and 16%, respectively. (The corresponding numbers for the African country of Mali are only 3% and 0.1%.)

[...]

Japan’s ratio of workers to retirees has been falling catastrophically: from 9 workers per retiree in 1965, to 2.4 today, to a projected 1.3 in 2050.

[...]

Japan is, and prides itself on being, the most ethnically homogenous affluent or populous country in the world. It doesn’t welcome immigrants, makes it difficult for anyone who wants to immigrate to do so, and makes it even more difficult for anyone who has succeeded in immigrating to receive Japanese citizenship.

[...]

As a percentage of a country’s total population, immigrants and their children constitute 28% of Australia’s population, 21% of Canada’s, 16% of Sweden’s, and 14% of the U.S.’s, but only 1.9% of Japan’s.

[...]

Among refugees seeking asylum, Sweden accepts 92%, Germany 70%, Canada 48%, but Japan only 0.2%.

[...]

Foreign workers constitute 15% of the workforce in the U.S. and 9% in Germany, but only 1.3% in Japan.

[...]

For instance, it is not widely known that 10% of the victims killed at Hiroshima by the first atomic bomb were Korean laborers working there.

[...]

The percentage of Japanese opposed to increasing the number of foreign residents is 63%; 72% agree that immigrants increase crime rates; and 80% deny that immigrants improve society by introducing new ideas, unlike the 57%–75% of Americans, Canadians, and Australians who do believe that immigrants improve society.

[...]

“Unlike Germans, the Japanese have not had a catharsis and rid themselves of the poison in their system. They have not educated their young about the wrong they had done. Hashimoto [a Japanese prime minister] expressed his ‘deepest regrets’ on the 52nd anniversary of the end of World War Two (1997) and his ‘profound remorse’ during his visit to Beijing in September 1997. However, he did not apologize, as the Chinese and Koreans wished Japan’s leader to do. I do not understand why the Japanese are so unwilling to admit the past, apologize for it, and move on. For some reason, they do not want to apologize. To apologize is to admit having done a wrong. To express regrets or remorse merely expresses their present subjective feelings. They denied the massacre of Nanking took place; that Korean, Filipino, Dutch, and other women were kidnapped or otherwise forced to be ‘comfort women’ (a euphemism for sex slaves) for Japanese soldiers at the war fronts; that they carried out cruel biological experiments on live Chinese, Korean, Mongolian, Russian, and other prisoners in Manchuria. In each case, only after irrefutable evidence was produced from their own records did they make reluctant admissions. This fed suspicions of Japan’s future intentions. Present Japanese attitudes are an indication of their future conduct. If they are ashamed of their past, they are less likely to repeat it.”

[...]

Until 1853, while Japan was closed to the outside world and did negligible importing, it was self-sufficient in natural resources.

[...]

Forced to depend on its own forests, and alarmed by their declines in the 1600’s, Japan pioneered in developing scientific forestry methods independently of Germany and Switzerland, in order to manage its forests.

[...]

Japan is also the major country most dependent on imported food to feed its citizens. Japan today has the highest ratio (a factor of 20) of agricultural imports to agricultural exports among major countries.

[...]

Japan appears to be the developed country with the least support for and the strongest opposition to sustainable resource policies overseas.

[...]

“In spite of my experiences during the Japanese occupation and the Japanese traits I had learned to fear, I now respect and admire them. Their group solidarity, discipline, intelligence, industriousness, and willingness to sacrifice for the nation make them a formidable and productive force. Conscious of the poverty of their resources, they will continue to make that extra effort to achieve the unachievable. Because of their cultural values, they will be lonely survivors after any catastrophe. From time to time they are hit by the unpredictable forces of nature—earthquakes, typhoons, and tsunamis. They take their casualties, pick themselves up, and rebuild.… I was amazed at how life was returning to normal when I visited Kobe in November 1996, one-and-a-half years after the [massive] earthquake. They had taken this catastrophe in their stride and settled to a new daily routine.”

World War Two had immediate consequences for Australia’s immigration policy, Jared Diamond notes (in Upheaval):

But Australia’s main contribution to World War One was to contribute a huge volunteer force—400,000 soldiers, constituting more than half of all Australian men eligible to serve, out of a total Australian population under 5 million—to defend British interests half-way around the world from Australia, in France and the Mideast.

[...]

More than 300,000 were sent overseas, of whom two-thirds ended up wounded or killed.

[...]

Almost every small rural Australian town still has a cenotaph in the town center, listing the names of local men killed in the war.

[...]

Australia abolished the draft in 1930 and built only a small air force and navy.

[...]

On February 15, 1942, the British general in command at Singapore surrendered to the Japanese army, sending 100,000 British and Empire troops into prisoner-of-war camps—the most severe military defeat that Britain has suffered in its history (Plate 7.7).

[...]

Sadly, those troops surrendering included 2,000 Australian soldiers who had arrived in Singapore only three weeks earlier, on January 24, in order to serve in the hopeless task of its defense.

[...]

In the absence of British ships to protect Australia, the same Japanese aircraft carriers that had bombed the American naval base at Pearl Harbor heavily bombed the Australian city of Darwin on February 19, 1942 (Plate 7.8).

[...]

To Australians, the fall of Singapore was not just a shock and a frightening military setback: it was regarded as a betrayal of Australia by its British mother country.

[...]

As a result, although Australia was attacked directly in World War Two but not in World War One, Australia’s casualties in World War Two were paradoxically less than half of those in World War One.

[...]

After World War Two there unfolded a gradual loosening of Australia’s ties to Britain and a shift in Australians’ self-identification as “loyal British in Australia,” resulting in a dismantling of the White Australia policy.

[...]

World War Two had immediate consequences for Australia’s immigration policy. Already in 1943, Australia’s prime minister concluded that the tiny population of Australians (less than 8 million in 1945) could not hold their huge continent against threats from Japan (population then over 100 million), Indonesia (just 200 miles away) with a population approaching 200 million, and China (population 1 billion).

[...]

All of Japan and Java is wet and fertile, and much of the area of those islands is suitable for highly productive agriculture. But most of Australia’s area is barren desert, and only a tiny fraction is productive farmland.

[...]

But Australia’s prime ministers in the 1940’s were neither ecologists nor economists, and so post-war Australia did embark on a crash program of encouraging immigration.

[...]

As a first step in that direction, Italian and German prisoners of war who had been brought to Australia were permitted to remain.

[...]

Australia’s minister for immigration from 1945 to 1949, Arthur Calwell, was an outspoken racist. He even refused to allow Australian men who had been so unpatriotic as to marry Japanese, Chinese, or Indonesian women to bring their war-brides or children into Australia. Calwell wrote, “No Japanese women, or any half-castes either, will be admitted to Australia; they are simply not wanted and are permanently undesirable… a mongrel Australia is impossible.”

[...]

In 1947 Calwell toured refugee camps in post-war Europe, found that they offered “splendid human material,” and noted approvingly of the Baltic Republics, “Many of their people were red-headed and blue-eyed. There were also a number of natural platinum blonds of both sexes.” The result of that selective encouragement of immigration was that, from 1945 to 1950, Australia received about 700,000 immigrants (a number nearly equal to 10% of its 1945 population), half of them reassuringly British, the rest from other European countries.

[...]

The undermining of the White Australia policy that produced the Asian immigrants and Asian restaurants awaiting me in Brisbane in 2008 resulted from five considerations: military protection, political developments in Asia, shifts of Australian trade, the immigrants themselves, and British policy.

[...]

To the shock of Australians, in 1967 Britain announced its intent to withdraw all of its military forces east of the Suez Canal. That marked the official end to Britain’s long-standing role as Australia’s protector.

[...]

By the 1980’s Australia’s leading trade partner was—Japan!—followed by the U.S., with Britain far behind.

[...]

Hence Britain applied to join the EEC. That application and its sequels constituted a shock to Australia’s and Britain’s relationship even more fundamental than had been the fall of Singapore, although the latter was more dramatic and symbolic, and lingers today as a bigger cause of festering resentment to Australians.

[...]

Britain’s Commonwealth Immigration Act of 1962, actually aimed at halting Commonwealth immigration from the West Indies and Pakistan, avoided appearances of racism by ending the automatic right of all Commonwealth citizens (including Australians) to enter and reside in Britain.

[...]

Britain’s 1968 Immigration Act barred automatic right of entry into Britain for all FOREIGNERS (Australians were now declared to be foreigners!) without at least one British-born grandparent, thereby excluding a large fraction of Australians at that time.

[...]

In 1972 Britain declared Australians to be ALIENS (!).

[...]

From an Australian perspective, it may seem that Australian identity changed suddenly and comprehensively in 1972, when Australia’s Labour Party under Prime Minister Gough Whitlam came to power for the first time in 23 years. In his first 19 days in office, even before he had appointed a new cabinet, Whitlam and his deputy embarked on a crash program of selective change in Australia, for which there are few parallels in the modern world in its speed and comprehensiveness. The changes introduced in those 19 days included: end of the military draft (national conscription); withdrawal of all Australian troops from Vietnam; recognition of the People’s Republic of China; announced independence for Papua New Guinea, which Australia had been administering for over half-a-century under a mandate from the League of Nations and then from the United Nations; banning visits by racially selected overseas athletic teams (a rule aimed especially at all-white South African teams); abolishing the nomination of Australians for Britain’s system of honors (knighthoods, OBEs, KCMGs, and so on) and replacing them with a new system of Australian honors; and—officially repudiating the White Australia policy.

[...]

Once Whitlam’s whole cabinet had been approved, it then adopted more steps in the crash program: reduction of the voting age to 18; increase in the minimum wage; giving representation to both the Northern Territory and the Australian Capital Territory in the federal Senate; granting legislative councils to both of those territories; requiring environmental impact statements for industrial developments; increased spending on Aborigines; equal pay for women; no-fault divorce; a comprehensive medical insurance scheme; and big changes in education that included abolishing university fees, boosts in financial aid for schools, and transfer from the states to the Australian Commonwealth of the responsibility for funding tertiary education.

[...]

Whitlam correctly described his reforms as a “recognition of what has already happened” rather than as a revolution arising out of nothing.

[...]

In 1954 the first visit to Australia by a reigning British monarch, Queen Elizabeth, was greeted by an enormous outpouring of pro-British sentiment: over 75% of all Australians turned out on the streets to cheer her (Plate 7.9). But—by the time that Queen Elizabeth visited Australia again in 1963, two years after Britain’s first EEC application, Australians were much less interested in her and in Britain.