"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Saturday, March 6, 2010

Why the Press Can't Remind Us

The English language press has become incapable of expressing the benefits of civilization.

David Rothkopf in Foreign Policy:
The media's obsession with daily polls and who's in and who's out and the cage match aspects of politics, has also unsurprisingly made it impossible (in a time of shrinking news department resources) to cover what should be covered. When was the last time you saw an in-depth thoughtful analysis of what's going on in the Office of Management and Budget or how funds were actually being spent or where the waste is in defense appropriations or what was actually working for students in schools? How about, say, a follow-up on how U.S. aid efforts were working in Haiti or the Middle East? Want a good example of the importance of the mundane stories? Chile just suffered an earthquake 500 times more fierce than that felt in Haiti. But the devastation in Chile, however epic in scale, has cost a fraction of a fraction as many lives because Chile put into place some fairly basic building codes. Who talks about building codes on the nightly news? No one. How could they possibly hold up in comparison to the political dogfighting that makes it look like Michael Vick is the Commissioner of American Politics?

To be fair, I have heard this topic addressed, but the press seems to be saying it's because Chile is wealthier than Haiti. Surely that figures in, but it misses the point.

The relatively more modest disaster in Chile happened because Chile has a more effective regulatory structure than Haiti. Government, like insurance when it works, is a cost when things are going well and a benefit when things are going badly. It takes the dramatic edge off of life. It adds some overhead when there is no earthquake, but it saves your rear when there is an earthquake.

As a consequence of such nuisances of government, there is less fear and desperation, less violence, less corruption endemic to the well-governed society. Life becomes better, even for the rich, when the poor are not desperate.

It is the press's job to explain this. It's too bad they have almost completely forgotten it themselves.

Another interesting piece, which appears today in Newsweek (of all places!) by Rana Foroohar and Mac Margolis, about the burgeoning middle class in the developing world, is a good counterexample. But it is one that amplifies the point about the feedback loop between security and civilization:
Close to 30 percent of Brazil's new middle class owes its livelihood to the informal market, where income is irregular, safety nets are nonexistent, and opportunity for entrepreneurship is limited. Many have borrowed their way to higher living standards, one reason perhaps that 53 percent say they live in fear of unemployment, loss of income, or even bankruptcy. They have benefited from the explosion of private schools but have seen the overall quality of education plummet, eroding one of the classic middle-class paths to social mobility. "We still don't know how sustainable the rise of the new middle classes will be," says Brazilian political scientist Amaury de Souza. And to the extent that the new middle class is precarious, its ability to effect political change will be, too. Indeed, some development economists argue that the poor will be a greater force for social change. There is no middle-class parallel to the broad push for land reform among rural leaders in China. They are the agitators, unwedded to the status quo. The developing world's new consumers may have unleashed tremendous new energy at the checkout counter. But their ability to become a force for better government, greater freedoms, less corruption, and more economic liberty is much less certain. "They" have a very long way to go before becoming "us."
A longer way, it seems, than "we" have before becoming "them".


EliRabett said...

The lesson of France in the nineteenth century is that prosperity and security decreases population.

Pangolin said...

The english language press has given up the idea of objective reality. Whacky philosophies of fundamentalist Christians and New Age woo-woo have crowded out any discussion of the actual causes of events and the effects of proposed actions.

We really need to understand "memes" better and get a real grasp of how toxic memes become viral and rooted in populations. The magical thinking quotient I'm observing is extremely high lately.

dhogaza said...

"The relatively more modest disaster in Chile happened because Chile has a more effective regulatory structure than Haiti."

The first thing I noticed when I saw photos of demolished concrete buildings in Haiti was the utter lack of rebar in any of the construction.

And one of the first things I read about the Chilean earthquake was an assessment by an engineer who works on earthquake-resistant building design and construction.

"Most concrete buildings in Chile are built with reinforced concrete, which is common throughout Latin America. But not in Haiti".

It's just sad to see that such a relatively cheap and (in most of the world) common technique such as the use of reinforced concrete wasn't used in Haiti in the past, at least (I have no idea what current standards of construction are there).

Of course, Chile does much more because much more is necessary to make large buildings capable of withstanding an 8.8 earthquake, but simple steps can help a lot.

And it's true that a lot of people would've died in Haiti even if smaller buildings were built with reinforced concrete. But we might be talking tens of thousands rather than hundreds of thousands dead, and that's worth something.

Also, though "only" a Richter 7 rather than 8.8, the Haitian earthquake's epicenter was just outside Port au Prince, while the epicenter of the Chilean quake was 60 miles from the Chilean capital. At least one small village near the epicenter was as thoroughly destroyed as Port au Prince, first by the quake, then by the resulting tsunami. Oh, and the Haitian quake was along a slip-strike fault, not a subduction fault, and such quakes tend to be more destructive ...

Strong building codes are a very good thing, but there's more to the story than just that.

Michael Tobis said...

60 miles from Chile's second city, (metro population 900,000), much more than that from the capital, Santiago, which suffered minor damage. But almost two orders of magnitude more powerful than the Port au Prince earthquake. (metro population almost exactly double that of Concepcion.)

So yeah, there are lots of factors. But government is one of them.