IPE at Middlebury College with James Morrison
Feb 9th, 2009 by James Morrison
This page will allow for a free-form discussion. Students should feel free to post whatever they like here: questions, comments, musings, &c.
Having read everybody’s posts, I am surprised by the immense interest of the class in China-US relationship. Though the yuan-dollar debate is an important one, I will not delve into it here as my classmate have already made my views on the topic.
Instead, I would like to present a few issues that were briefly mentioned in class lectures, but have been hardly explored here.
1) Questioning capital liberalism and the role of speculators in international monetary system
The case of Soros attacking the British pounds has been presented, but the implication of such speculative attack was not discussed as much in class. I am not very familiar with the case of British pounds, in terms of the economic/political damage that such successful speculative attack brought. However, I know a little bit about the Asian Financial Crisis in 1997. As “contagion” nature of short-term capital flow fully manifested itself, the South East Asian economies (both originally-problematic ones and healthy-yet-”speculated”-as-problematic ones) deeply suffered from its currency instability caused by speculators’ attack. Unlike the British economy, these were developing infant economies which depended much on continuous foreign investment. In other words, the damage from speculative attacks were greater in these economies than developed economies, even if they were at the same level of capital openness. As a result, these economies did not get back to a sustained course of growth for many years to come.
It is the speculators who attacked the economy, however it was the international monetary system with loose capital controls that set the preconditions for such attacks.
Nowadays, currency speculation has become a legitimate way of earning living for some people. While the Gold Standard and the Bretton Woods system de facto limited short-term capital flight, the current international monetary system allows currency speculation, which can greatly undermine economic stability in this increasingly interconnected world.
2) The role of the IMF and its effectiveness.
As we learned in our class that the IMF practically “reinvented” itself to continue existing in the post-Bretton Woods system. Now the IMF is seen as the official development agency of the developed countries, along with the World Bank and other development banks. However, as many of us have heard, despite its financial and political power, the IMF’s professional expertise in the area of economic development has been questionable. Given its failures in South East Asia and many African countries, maybe it’s the time again to not only “reinvent its purpose of existence”, but also “reassess its claimed professional expertise” and “reflect on its appropriateness of existence.”
I honestly don’t see the problem with currency speculation (or speculation in commodities like oil for that matter). If the pound hadn’t been overvalued in the first place, Soros’ ‘attack’ would never have worked. In effect, he just sped along the process of getting to the market rate. The real problem was not enough demand for British goods and services, so devaluation was inevitable. People who earn a living speculating on changes in exchange rates help to keep the exchange rate near the market rate which theoretically optimizes economic outcomes. Likewise, speculators in oil help to smooth out the rapid peaks and troughs that fluctuations in supply and demand would cause otherwise.
Here is a recent Economist article (from last week’s issue) that is directly relevant to our discussion of Malthusian fears: http://www.economist.com/opinion/displaystory.cfm?story_id=14744915
Most significantly, the article observes that contrary to Malthusian theory the industrialized world has witnessed a pattern of falling fertility wherein “when people got richer, families got smaller; and as families got smaller, people got richer.” It goes further than this, however, noting that the Malthusian worry of unsustainable population growth is still a very real concern that can best be addressed through a combination of technological innovation and governance.
Following on Nicks post, i think it is important to reiterate that there while there is a strong correlation between population and economic growth, there is no clear causal relationship. The elective affinity the two share has to do with the idea of development writ large; one important model of developmental demographics is the birth rate/ death rate graph, where a society transfers from a pre-developmental moment of high-birth rate high-death rate to a moment of low birth-rate low death-rate. However, there is usually a lag in which death rate-drops off while birth-rate remains high–in this period, a country’s rate population growth soars before eventually leveling off. This was the experience of Europe in the Enlightenment and Industrial ages. The question that needs to be answered is why some developing countries have succeeded in lowering mortality rates while prolonging the lag in declining fertility-rates and what effect that demographic explosion is having on the economy.
I just wanted to go through some of the scientific stuff the articles we read and Gore mention in making their points. You can find a lot of very interesting great information on climate skepticism from (not saying I agree with everything here)
http://www.wattsupwiththat.com (not to say there is nothing published, there is, but this site will link you to sources and discuss most things relevant to climate change)
and of course the show I do with my friend Nate on weather and climate Sundays at 4 on WRMC (also listen in for the latest and best forecast for snowstorms this winter!!)
Gore’s movie makes a number of false claims. Indeed the movie has been ruled alarmist and false on nine counts by a British High Court.
1) More frequent and intense hurricanes and linking Katrina to GW.
There is almost nothing to back this up in the scientific literature. Global Accumulated Cyclone Energy, or ACE, has shown no trend over the last 50 years, and has been at record low levels the last two years. ACE measures the total combined energy, or intensity*frequency of all hurricanes. The only evidence to back this up (which wasn’t even available when he made the movie) is a Nature article showing a weak upwards trend in the number of the most severe hurricanes (which was counteracted by a downward trend in the number of moderate and weak hurricanes). This cannot be definitively linked to global warming.
2) Hockey stick graph
He uses the hockey stick graph to exaggerate the appearance of warming in the famous elevator scene. This graph has since been shown to be misleading. Because the graph switches from proxy data to actual thermometer data in 1900, the data after 1900 is much more precise and will show more of the year to year and decade to decade fluctuations that occur naturally. There is good evidence that during the Medieval warm period 1000 years ago global temperatures may have gotten as high or nearly as high as present. But because the proxy data covers up short term variability, this isn’t seen in the Gore graph. A general rule of statistics is not to switch sources partway through your data set. There is also evidence that the proxy data wasn’t entirely accurate.
3) Sea level rise.
Shows pictures of major cities being flooded when IPCC 2007 predictions are for only 1-2 feet, even with a warming of 3C globally. Clearly a scare tactic.
4) Melt water will run underneath the Greenland ice sheets and cause them to slide off into the sea unexpectedly.
Totally unrealistic. There is evidence that when large surface lakes suddenly drain underneath the ice there is a brief small acceleration. This could cause them to speed up somewhat, but won’t cause massive ice loss. It’s going to take at least a couple hundred years to loose the Greenland ice sheets even with a lot of warming. Best estimate with continued CO2 emissions: 400 years according to most scientific literature. Gore implies it could happen soon.
5. Linking loss of snows on Kilamanjaro to climate change.
The loss of snow on Kilamanjaro is due to the clearing of forest (ironically a much bigger environmental issue) causing drying of the air. This was known at the time he made the movie and it was ignored because of the symbolic alarming value of the symbol.
there are more but I think that’s enough for now..
Stiglitz mentions a disappearance of the Gulf Stream – this is highly unlikely and there is virtual no science behind this happening.
He also mentions 1/3 of Bangladesh being underwater by 2100, but this is based on more extreme predictions which are not generally accepted. The IPCC 2007 prediction is 1-2 feet, which of course is bad enough.
Lomborg makes a number of good points about Gore’s movie, but his point that Gore ignored increases in Antarctic sea ice is not. Antarctic sea ice is mostly controlled by currents, not temperatures. Thus it wouldn’t make much sense to look at changes in Antarctic sea ice in a discussion of global warming. Arctic ice, is however, strongly influenced by temperatures. There’s a reason people ignore Antarctic sea ice.
1) McKibben’s first mistake is calling Lovelock a competent observer. He’s insane and he is totally 100% unscientific and there is a large body of scientific literature contradicting him. But he’s in his 80s and I think the Gaia hypothesis is actually quite intriguing, so I’ll cut him a break.
2) The data coming back from the earth and climate has been nearly universally worse than predicted (so we should assume it will be worse than predicted in the future too).
Not even remotely true. Hansen’s 1988 temperature predictions and IPCC’s 1990 temperature predictions were way off and both have come out and admitted those predictions ‘assumed too large a climate sensitivity to CO2.’ Look at a graph vs. predicted and you’ll see what I mean. It’s that far off.
Sea ice predictions this year were way too far off. Experts asked to submit predictions to the National Snow and Ice Data center (NSIDC) for this years arctic sea ice minimum, which occurs in September, unanimously underpredicted how much ice there would be. Surveys were done all spring and revised all the way right up until July. There were 15 predictions in July, all underpredicted what would happen in September by a huge margin.
The chair of the NSIDC said in 2007 when ice melted dramatically that sea ice had entered a “death spiral.” The general idea was ice loss was accelerating. Instead sea ice which usually only fluctuates a quarter million sq km from year to year, has recovered a solid 1 million sq km from 2007 to 2009 (From 4.2 to 5.3 – a 25% recovery).
Even the most recent temperature predictions from literature up to 2005 included in the 2007 IPCC report show temperatures rising much faster than they have. Because of the decline in temperatures 06-09, especially in 2008, the 12-yr trend-line is now flat. The probability of a flat 12-yr trend-line according to the UN was less than 20%. Not a failed prediction (yet) but getting there. The leveling off of temperatures since 1998 also suggests that there is a cyclical component to global temperatures that the UN has been ignoring called the PDO. The PDO is a measure of temperatures on the Pacific ocean and influences global weather patterns. It oscillates on a ~30-yr time scale. During it’s last negative phase 1945-1975 global temperatures flat-lined or slightly declined. During its last two positive phases 1905-1945 and 1975-1998 temperatures rose dramatically. There is a background warming as well. Since the PDO has gone into a neutral-negative phase in 1998 (it’s not totally clear we are in a new negative phase yet) global temperatures have flat-lined or slightly decreased … as PDO-theory would predict!!
IPCC predictions of methane rises have been totally off. Methane in the atmosphere was predicted to rise and it has not in the last 10 years. CO2 levels haven’t risen quite as fast as predicted given the higher than expected CO2 emissions.
All of these are some quite reassuring signs about climate change I think (relative to the dire predictions).
3) Methane is leaking from Siberia at five times the predicted rate and this is bad news because methane is a very potent GH gas.
Yes, there has been some evidence of very rapid methane loss from Siberian lakes. But no one knows the total emissions of Siberian lakes and bogs. If they did perhaps they could tell us why the concentration of methane in the atmosphere hasn’t been increasing at all for the last 10 years (contrary to predicted).
4) James Hansen is the world’s top climatologist. He even provided a citation!
Not true. Hansen is as I said in the discussion, the father or ‘god’ of climate change, but certainly isn’t the top scientist. First of all climatology incorporates many different fields and there are the foremost experts in those fields. Second of all, in terms of modeling the predictions of climate change there are many more advanced modelers out there. Third, he has become more of an activist than a scientist and Hansen’s former supervisor at NASA has since said that in his time at NASA, Hansen “embarrassed the agency.”
5) The earth is as hot as it has been in a million years. No one has accurate or precise enough data to know this. We can’t even be sure this is the hottest in the past 2000 years (although it is likely). There’s strong evidence the Holocene Thermal Maximum around 10,000 years ago was warmer than present, with Arctic temperatures up to 4C warmer than present. You’ll note polar bears were around back then and did just fine. Prior to that we were in an ice age so it’s not entirely surprising we have warmed since then.
6) His information on the solar industry has become out of date in the 3 years since his article.
The solar industry hasn’t been growing 20-30% a year, it has been almost doubling some years. Also it’s no longer just Japan and Germany, the major markets now include the U.S. (esp. CA), China, Spain and many other European nations. The price of producing has been cut in half in the last five years and fell by 30% this year alone. It’s projected to fall another 60% or so in the next few years. It likely will become as cheap or cheaper than conventional electric power generation in many grids, perhaps most. Basically, we should have subsidized solar a decade ago but were too busy arguing with the Bush administration if and when the world was going to end.
My personal issues with climate change:
1) Temperatures not rising quite as predicted. Beginning of a divergence IMO.
2) The PDO has been ignored. A ~30-yr cycle between warm and cold pools in the N. Pacific. Warming occurred 1905-1945 and 1975-1998 during its last two warm periods. Cooling/flatline in temperatures occurred during its too cold periods, 1945-1975 and 1998 to present.
3) Solar activity, according to a study in Nature, was higher in the last 70 years of the 19th century than any other 70 year period in the last 10,000. There are number of obvious and less obvious ways in which the sun could influence climate.
4) The physics of CO2 will only cause 1.2C of warming if CO2 concentrations are doubled from 390 at present to 780. The rest of the predicted warming is hypothesized feed-backs which are extremely complex and which I do not believe we have a good grasp of. Mostly its cloud feed-backs. Predicted cloud cover changes in response to global warming is found by looking at what happened in the 20th century. Except there’s good evidence of cloud changes due to other factors in the 20th century, not just GW. Personally I believe in 0-2C of warming by 2100 with continued emissions.
So if anyone’s interested or disagrees I’d love to hear.. tune into our show if we get McKibben on air. Sorry most of this wasn’t cited or provide sources, I was in a rush (sorry for so long!), but I would be happy to provide them if anyone wants them.
So, first let me say that discussion yesterday was really great. Also, Andrew P pwns.
To Andrew P – of course I’m interested. And I will now make an effort to tune in to your show. Everybody could learn a lot.
Personally, after weighing Andrew’s arguments and everything we’ve read so far, the specific issue of global warming has become much less of a big deal to me. For me, the point is that mankind is having *some* degrading effect on his natural environment. And time is relative. Whether or not these effects will dramatically change things a century from now or a millennium from now, and whether or not these effects will be the cause of the end of all life… is, to me, missing the crucial element of the *NOW*. This is where I agree wholeheartedly with Lomburg’s argument.
We discussed SETI very briefly in lecture (it’s the search for aliens). Well then – suppose we find them. Then what? Consider the analogous example of meeting the new neighbors in town. Do you invite them over if your Uncle, sickly, starving and abandoned, is shacked-up (literally) on your front lawn? Ok, that wasn’t a very good example…
…but the point remains that while global warming is an issue that we are good to think about *now* (seeing that it will realistically and substantially affect us sometime in the far future), THE HUMAN RACE HAS MORE PRESSING ISSUES RIGHT NOW THAN THE END OF ITS EXISTENCE.
And I guess I’m especially passionate about this because I’m from a developing country. I mentioned, at the very end of our first discussion period, that to be able to willingly devote about millions of dollars in time, resources and energy into this idea of ‘fighting global warming because it will kill all human life in the future’ IS A LUXURY. You can only worry about the entire human race AFTER you’re finished worrying about yourself. And trust me, so many many people still have to worry about themselves and their families, every day.
Disease. Literacy and Education. Economic stability. These should be the issues at the top of the list.
Ok, I’m clam now.
I thought the recent talks between President Obama and Hu Jintao would be of interest to both our talks on global environmentalism and global finance.
Needless to say, there seems to have been little gained on any front, particularly that of China’s currency policy of a strictly devalued renminbi. This of course is contrary to the 2006 predictions of Barry Eichengreen’s piece we read earlier: “China’s Exchange Rate Regime.” This is disappointing because, in regards to our recent discussion on national debt and fiscal responsibility, a revaluation of the dollar to the yuan would be one way to fix the disequilibria of our Balance of Payments.
Diplomatically, we seem to have few choices when dealing with China. The days of the bellicose world cop are over and there is little i can think of that would be a powerful negotiating point for our side (apart from the series of positions we are not about to compromise on: tibet, taiwan, iran, human rights…). The only thing that comes to mind is the fact that, with China holding so much of our debt, they are to a certain extent beholden to us. We could, for instances, inflate the debt away, leaving both of us at a disadvantage: China with a decreased bond revenue and the US with a hugely inflated dollar. With this as a possibility benefiting neither side, let us hope Obama’s stayed approach will lead to future cooperation.
Well, it’s hard to say it’s contrary to Eichengreen’s predictions when they have already revalued a further 19% since he wrote that piece in 2006 on top of the 2.1% they revalued in 2005. I think it makes sense that China ended the revaluation in August 2008 because of the slowing economy and appreciating dollar. The Chinese economy had already begun slowing in early 2008, so it would make sense to lock down on exchange rates temporarily to keep employment up. Once GDP growth rates exceed 10% again, maybe they will become looser on exchange rates. It’s back up to 8.9% in Q3 2009, up significantly from Q1. The dollar also began rapidly appreciating against the Euro in July 2008, which is when the Chinese abruptly stopped appreciation against the dollar. Now that the Dollar peaked against the Euro in January, and has been steadily declining since as the crisis wanes, perhaps that will prompt the Chinese to resume appreciation against the dollar.
In the first article in this Jan 2008 debate over Chinese Exchange Rate policy Goldstein argues that it is in China’s interest to use a 15% devaluation stepwise appreciation against the dollar, followed by 6-8% a year after that. Given the downward pressure on the dollar from current low interest rates, the need for such an appreciation can only have grown since then. Given the paper’s presented at this forum, it sounds like the appreciation which was accelerating up until the crisis should resume as soon as the crisis abates both because the dollar will devalue globally and because Chinese growth will resume. If that’s the case, maybe the public statements are just for show.
Correction: that should read ’15% stepwise appreciation’ not ’15% devaluation stepwise appreciation’ which makes no sense.
There are some great points in the first article linked to on the class home page. I particularly like:
“This [revaluation] will not be the result of foreign lobbying—indeed, China is more likely to change its policy if foreign policymakers shut up.”
Obama publicly encouraging China to revalue will make them look weak when they actually do revalue. They don’t want to appear as giving in to American pressure. It also suggests that once GDP growth gets back to 10% and exports which are vital to maintaining employment stop falling, they will allow appreciation to continue. They’ll wait until the politically and economically opportune moment to continue appreciation.
So after reading Andrew’s comments on global warming and the responses left by others, I couldn’t help but relate this discussion to a question posed in one of my classes last year: “Is it everybody’s responsibility to recycle”? Ten students formed a human barometer. Agree on the right, disagree on the right, and somewhere in the middle…obviously in the middle. So 9 out of the ten students stood by the agree sign and one student was by the disagree sign. Some of the students by the agree sign spoke and argued in order to protect the environment everyone should recycle, it should be a collective effort because everyone has a stake in the matter. When the lonesome guy on the right was given his turn to speak he argued that you cannot expect everyone to recycle because there are so many people in this world who have more important things to worry about. A single mother in an urban city working 2 jobs to support her kids is not going to care about whether the item she is throwing out goes in one bin or the other. It is simply not a priority. This is a microcosm of the environmental problem on an international scale. The responsibility lies among the richer states to act as leaders because weaker states simply cannot devote resources energy, or time to the problem. The tension then lies with the developing states like China and India, who should take an interest in the environment, however; are not as willing to because in the short run it will hurt them financially. In addition, these developing states are doing the exact same thing we did during our industrial age so who are we to stop them?
Also, after Al Gore’s film and US IOU, I feel like people, such as has-been politicians, are trying to scare the public with terrifying statistics and pictures and in turn they are having an opposite effect because by blowing things out of proportion they take away from the seriousness of the issue. I always find my self asking is that really true? Are we really on the verge of collapse? I do think if we don’t change both domestic and international policies to work towards solving today’s pressing issues then the end is near; however, if people spent as much time getting their facts straight as they do playing around with statistics and figuring out ways to hype them up, then we would be so much closer to achieving our goals of economic and environmental stability.
Nice posts mates! Sorry guyz, I was meant to post this email that I sent to Prof. Morrison a while ago but I got caught up– so here you go!
You are right professor. According to CIA – The world factbook, Nigeria may after all have a relatively lower % rate of pop. growth in Africa (just about 2% at this time) despite the fact that it is the most populous country in the continent… Nigeria is 60th in the world in terms of population growth compared to Niger (which is 2nd in the world and 1st in Africa with about 3.68%), http://www.indexmundi.com/g/r.aspx?c=ni&v=24 https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html
However, I still think that overpopulation (due to birth rate) is not the issue. The issue is urbanization / uneven net migration or uneven distribution of population relative to resources (that are either tapped or untapped). One only has to travel across Africa or Asia to notice that trend. *Nigeria’s net migration is -0.1% and it’s rate of urbanization is about 4%…
So I don’t think “the earth has a limited carrying capacity,” and there is hardly a way of predicting that population has or will exceed (available) resources…I stand to be corrected on this and I’m sure we’ll talk more abt that in discussion… (end of email)
Now, I still don’t buy into the Malthusian theory!!
Look, my mom has 8 kids and I fall in the middle. Imagine if my mom had decided to stop giving birth after her third child. I wouldn’t have been in existence today and would not be contributing to this blog today. And now you expect me to endorse Malthus. Over my dead body!
Anyway, I know this is a normative question but I also think that we have better growth models or should maybe look for better ones other than the simplistic neoclassical (solow) growth model.
Also, the idea that we should leave poor and helpless babies to die from curable disease under the pretext of saving the planet is simply absurd. If we are truly concern about reducing world population, I have a much better idea, and let me know what you think about it. My idea is that we should set an upper age limit (say, 100 yrs or even 90 yrs). And who ever exceeds that age limit should be put to death and his/her wealth confiscated and distributed among the needy. Japan could be an ideal place to start off with (no offense Xue) because I’m pretty sure they’ve got a lot of old folks there ☺ This, in my opinion, is not only economically viable but is also relatively morally justifiable. Why? Well you’ll agree with me that such old folks are not part of the work force; they contribute little, if any, to the general welfare of society. And they probably even contribute more to environmental pollution because they cannot move from one place to the other without some kind of transportation (mind you they’re too old to bike). Moreover, they’ve had enough of their share of worldly life and ought to give room to others. So it’s probably cost effective to eliminate these old folks instead of babies who could become the Obamas or Madelas or Kofi Ananas of tomorrow.
We should leave people to make as much babies as they like. It’s their choice. Having few babies doesn’t necessarily mean that the world will be a better place. What if those 2or 3 babies turn out to be rebels or hooligans who pollute the world as much as 10 others do—maybe that third baby was going to be McKibben or Al Gore. One never knows.
In Week 11’s readings, Stiglitz’s “Odious Rulers, Odious Debts” really struck me as apt in describing current debt problems in many developing countries.
“Iraq needs a fresh start, and the only real way to give it one would be to free the country from what some call its “odious debts”—debts incurred by a regime without political legitimacy, from creditors who should have known better, with the monies often spent to oppress the very people who are then asked to repay the debts.”
Stiglitz concludes his article by recommending that the US commits itself to establishing a framework for addressing debt relief, debt restructuring and odious debts, in which a possible solution would be an international court that can develop and enforce a set of widely agreed-upon principles. This is an opinion shared by many other advocates for debt relief, such as Bono, who agree that creating a sovereign debt workout mechanism would allow cases of state insolvency to be worked out in a fair and transparent manner. Such an institution has the potential to be a much anticipated solution to unsolved debt problems which benefit neither creditors nor debtors.
Yet given the number of things on Obama’s list of things to do, I wonder where this debt relief of developing countries is ranked. On the other hand, there is the issue of debt relief in developed countries to be pondered about too, as evidenced in the most recent debt crisis in Dubai which is putting downward pressure on worldwide stock markets. Closer to home is America’s own debt crisis which some, such as Congressman Ron Paul, believe are making her vulnerable to foreign creditors.
Dani Rodrik mentions the implicit postwar social bargain in advanced industrial countries in which governments provided social insurance and safety nets at home in return for the freedom to adopt freer trade policies. However the past years of increasing globalization has seen this social consensus weaken, because globalization is generating an inequality in bargaining power for employers which allow them to move abroad. Things may seem rosy now, with protectionist trade policies not hindering the majority of globalization flows from taking place. However, Jeffrey Williamson raises a thought-provoking possibility that rising income inequality which was partially responsible for causing a retreat from globalization during the inter-war years, can cause a similar decrease in globalization trends if this inequality problem is allowed to build up.
Grieco and Ikenberry nicely summarize that the scope and sustainability of economic globalization is ultimately dependent on how current governments manage the tensions produced by our present-day economic interactions. Like Krugman, I believe that the government has a strong role to play in mitigating crises and prolonging globalization.
In response to Alhaji’s post, I’m not clear as to whether your proposal is real or if you are suggesting it to make a point. Either way, setting an upper age limit and putting those above it to death doesn’t serve the same function as Malthus’s option. Firstly, while people over 90 or 100 may not be the most productive members of society, I highly doubt legislation could be passed that involves murder, albeit utilitarian. Preventing something from ever existing and ending something that is already there are completely different ways of operation. Secondly, eliminating old people from society would not have nearly as large of an effect as limiting births, as people over 90 or 100 are close to their natural death anyway, and thus eliminating them would not do much at all, where as preventing entire life spans could do much more. Furthermore, countries that have significant populations over 90 or 100, such as Japan, are strong enough to support them. Also, if we think of it more on an individual family basis, the more children in a family, the more resources are stretched and the less likely a child is to be brought up in an ideal environment, especially in a low-income or single parent family (speaking in general terms).
This may not be entirely relevant to coursework, but Alhaji’s post got me thinking. I really enjoyed reading the Malthusian proposal to put an age limit on the population, and though I took to be farcical to point out the inhumanity of dealing with such issues in a purely logical manner, you are actually not so far off from some ideas that are gaining acceptance. In health care, what we are beginning to see now – and will continue to see more of in the future as costs continue to rise – is the rationing of medical care, which is exactly what it sounds like. As hospitals run into worsening budget crunches, it becomes increasingly necessary to devote available resources to the places where they will do the most good for the cost. Logically and economically, it doesn’t make sense to treat a 90-year-old with metastasized liver cancer when the projected outcome is an additional year or two of life when that same money elsewhere could be used for preventative care that would actually save more lives and money over the long term. This emerging system is really a form of triage taken to an extreme. The amount of money spent (in the U.S. and abroad) in medicine on care that has a return ratio of less than 1 (expected value created in terms of X dollars per life-year/cost of care) is staggering, and places an enormous strain on economies (there, I at least partially tied this post to something related to the course), and detracts from the total amount of good that could be done given a finite budget. Of course, such solutions, as Alhaji made clear, are morally abhorrent and politically unappealing as a result; no one wants to see Grandma die early because his/her representatives voted to cut off care in cases where society will not recover the costs of treatment. So where does that leave us? Struggling under the burden of providing top-quality care to everyone who needs it while still trying to remain fiscally solvent – in other words, it leaves us in one hell of a mess. Even the European systems, which are generally rated as more inclusive and egalitarian than the American and some other systems, are feeling the strain. With all the talk about universal health care being a panacea, we’ve lost sight of the fact that without some major changes to the way the system operates, health care might be a large part of the next economic crisis, both in the United States and abroad.
Additionally, Alex, I thought you made some really good points in your response to Alhaji’s post, although I’d like to clarify one thing that you said. Countries with aging populations, such as Japan, are supporting their elderly populations right now, but big problems lie ahead. I can’t speak to this problem in other countries, but Japan in particular, with its low birthrate, is approaching the point of unsustainability. Japanese culture has led to the development of a system in which children are often the primary care providers for elderly parents, and as a result, the system of elderly care in hospitals and nursing homes is not as developed as it is elsewhere. For elderly without children available to care for them, many struggle to take care of themselves, as public care facilities are overcrowded and understaffed, and private facilities are in many cases prohibitively expensive. So you are right that things are OK right now, but Japan faces serious challenges down the road.
(Prompted by a few words exchanged with Prof. Morrison before discussion). With the spread of corporations from the United States around the world, it becomes easy to forgot that the reason that smokestacks are not belching smog into the air and drainages are not pouring industrial waste into the water in our backyards is because they are doing so somewhere else. Regarding industrial organization, the British East India Company, and the difficulty of ensuring that foreign-operating companies maintain the standards of the United States in regards to environmental safety and worker relations, people around the world are suffering. The world’s worst industrial disaster was the result of an American company (in this case Union Carbide) following unsafe practices in a developing nation out of sight of the United States. The death toll for the Bhopal gas tragedy varies depending on who one asks, but estimates range up to 50,000 dead from both the original exposure and the ensuing harmful effects. The more recent murder of Sun Danyong by Steve Jobs’ agents in China harkens back to the days of the British East India Company, with corporations controlling their own armies. Now, while Apple might not have assassins protecting company secrets (although there is nothing to say that they do not), the suppression of human rights and fundamental freedoms in developing nations by western MNEs is certainly harmful. This topic connects well to another class that I am taking, the Economics of Happiness, in which we have just read Bill McKibben’s book, Deep Economy. In that book, McKibben discusses the tragic effects of western industrial organization on developing states and their populations. It is, as some commentators that we have read say, a new colonialism that is spreading to re-enslave Asia for the whims of the West, with no regard for those nations’ futures. However, due to the anarchic structure of the international system, there is little that can be done to ameliorate this terrible situation. A strong supranational organization would be needed to oversee the practices of MNEs, to keep an eye on their activities no matter how remote a region of the world in which they try to hide. Perhaps a strengthened IMF could perform this role as well as redistributing excess currency reserves. Enough polemic for one night, I think.
Alex and Will, thanks for your response to my post. I truly appreciate it! And I couldn’t help but respond back.
You see, sometimes I try to take (I don’t know if I succeed) a deconstructive approach in thinking through some of the very tough questions that we are faced with as a people. My approach (generally) is to strategically offer a view, an afrocentric perspective, if you like. And here is the reason why: To provide another perspective that endorses the fact that the problems are much more complicated and thus require well-thought-out solutions.
Now, I don’t want to pretend as if all the plights in Africa are the fault of “the west” Or “others.” In fact, some of the problems in Africa created by Africans are immense and the solutions are far-fetched! It will require multiple posts to exhaust just a handful of these problems and trying to figure out solutions. You all probably have got a glimpse of some of these complications just from reading Sachs etc. Also, you may be shocked to know that there are some Africans today who are longing to go back to colonial days – a clear manifestation of how some Africans are dissatisfied with the status-quo; their governments in particular!…
Now, this may sound naïve, but the reasons why I rarely bring some of these above-mentioned views up is simply because I think (I may be wrong) it is unwise to do so. why? Because:
1. Doing so may discourage any of you brilliant minds who might have an interest in being in a position where you can help Africa.
2. It defeats the purpose of the discussion, which in essence, is to evaluate various arguments and perspectives. One does not have to believe in his/her argument; it can just be another perspective, as was evident in our discussion today.
3. I am in the west. So say if I’m in a room in Africa, full of African intellectuals, with mainly afrocentric views, then I will reason with them using the other approach, Eurocentric, if you like, so as to deconstruct their views (make the discussion more interesting), see things with a much bigger lens and at the same time learn more.
Anyway, I just think that hearing different perspectives might be useful especially to some of us who might be interested in becoming policy makers or theorists. I know very well that many people genuinely put forward theories and policies to address issues affecting society at large, but we also know that these theories could be inadequate despite their relevance.
For instance, I’m presently doing an independent study on regional organizations in Africa, and it’s interesting to note some of my findings…just 2 quick examples:
- Some of the theories on regional integration, such as the neoclassical model, the functionalist model, and the developmental model, are (just on their own) insufficient in an African context. My suggestion is that one needs a combination of all three approaches, or a whole new theory that captures the reality of the African continent.
- A similar criticism of the Theory of Optimum Currency Area…but i do not have time to elaborate on it here…
In a nutshell, I sometimes (not always) try to make compelling arguments from an African perspective not because I necessary believe in everything (that I say) but because I sometimes simply want to learn more. And I want to believe that many of you sometimes (if not always) take similar approach.
So Alex en Will, in case you were wondering whether I was cynical, dogmatic, afrocentric, you name it haha, the answer is No! so yes, Alex, you’re right I was just “suggesting it to make a point” but I am not personally in favor of it being applied. That will of course be cruel right?… Anyway, I like to think of myself as an optimist or pragmatist for lack of a better term. No doubt that there are many problems out there. But I also believe the solutions are out there. Maybe the key to the solutions is TALKING, LISTENING and then LISTENING. I have been lucky enough (blessed with the opportunity) to travel and live in various parts of the world, in different status, exposed to different perspectives, and experience. This has enabled me appreciate the satisfaction that comes from LISTENING. I love listening, although I expect to be heard too together we’ll fix the world
Ok that’s it for now. hmm interesting it says on the corner of my computer 7°C (has dropped from 14°C earlier) — I can’t believe it is Dec 4th and it still hasn’t snowed yet. hmm, is that global warming in action??
I’ve always been really interested in Malthus. I have no idea if I agree or disagree, but I think the debate is always fascinating.
I think I come down sort of in the middle (which I usually hate). I think that our population is expanding pretty significantly and could exceed the “carrying capacity” of the earth, whether that is in terms of food, resources, or the environment. So I think it is necessary to perhaps create incentives for people to have fewer kids, but these incentives need to be positive incentives, such as a tax break or something like that, and not a limit on children or age (which gets into the whole rights debate).
The reason I think a positive check will be effective enough is that I don’t really see the doomsday scenarios playing out. There are still checks on population growth around the world. Europe and Japan are simply too old and are both facing negative growth rates. Affluent countries generally have low, stable growth rates. And then some places are even facing the possibility of population “crunches.” China’s one child policy has created incentives for parents to keep only male babies, and there simply aren’t enough females to go around. Combine that with the one child policy, and China’s growth looks like it could stagnate or even become negative in the nearly future as this generation competes for females (it could get more hostile than the Bunker). I can’t find the citation, but I read an article that says Africa also looks like it could be in for a population crunch because of the rapid spread of Aids, TB, malaria, etc.
So, while I do think overpopulation is something that we need to start thinking about seriously, I think contemporary Malthusians too often overlook the factors that go into global growth.
The story is a little dated at this point, but I was curious as to what you guys thought about the whole climate gate story about a week ago. In the first discussion section a couple weeks ago we talked about reasons to be skeptical of global warming and this story seems like a really nice point for Andrew’s side. Jon Stewart covered it on the Daily Show:
But basically hacked emails were released from a British climate research group, some of which discussed how to distort data on global warming. This relates to our discussion of data in An Inconvenient Truth, but I think the more interesting side of this issue is the lack of media coverage we’ve seen on this story. Some major news sources didn’t even report it; others referred to it in passing as “embarrassing” or defended the researchers. To me this just seems like an extension of the problem, this exaggeration of global warming claims and burying any evidence to the contrary. If emails were released from the other side (scientists/politicians discussing how to hide global warming) wouldn’t that be front page news?
Picking up on your point Spencer, I too have been fascinated by Malthus, most simply because he seems a rare example of a thinker with an incredibly low (or negative) discount rate. Jefferson worried about passing debt on to future generations. Environmentalists worry about passing degradation and climate change on to future generations. Malthus concerns himself so much with the future, however, that he is willing to categorically deny assistance to the poor, promoting suffering today for happiness tomorrow.
In our discussions, I think Malthus is significant because he urges us to consider limits. There may be absolute limits to growth or limits to the utility of growth. Usually, growth is considered good, particularly in economics. This discourse is pervasive. Even in the context of current environmental problems like climate change and resource scarcity, where Malthusian arguments would find the most traction, the discussion centers on sustainable development, which posits that continued growth, both now and in the future, is possible. Is this possible? The prescription of meeting needs now while preserving the ability of future generations to meet their own needs is vague. It leaves the determination of the discount rate open.
That Malthusians have failed to realize their dire predictions for the world does not suggest that Malthus was wrong, that the world is without limits. Looking at non-human populations and ecosystems, there is clear evidence for carrying capacities. Humans have pushed back (in the case of food) or avoided (possibly in the case of coal) limits, but not through Malthusian politics, but through growth. We brought this up in discussion. Those concerned with limits should not disregard the benefits of growth, which brings efficiency through economies of scale and innovation.
We need to consider the existence of limits, while realizing the benefits of growth in addressing them. Malthus looses his effectiveness — and, importantly, political support — by discussing only limits. A policy of stagnation does not confront limits but merely punts them farther into the future, a method that should be at odds with Malthus’s concern for future generations. Further, it promises moderate gains for future generations with losses at present. What are the prospects of a Climate Change bill financed through the elimination of welfare, medicaid, medicare, social security, or the killing of the first born?
In realizing the positive possibilities of growth for confronting limits, the vague message of sustainable development does not seem sufficient. We need to create economic measures for the cost of reaching these limits (or, as is usually the case, if limits are uncertain then economic measures to assess the risk). The problem with growth to date is not that it is inherently bad, but that economic progress does not account for all its effects. Again though, the economics seem simple. The politics are much harder.
Alhaji, you write like Mark Twain and you’ve sparked a good discussion on Malthus.
For obvious reasons, it’s difficult to talk about health care reform from a Malthusian perspective. Legislation to alter the health care system, which inevitably includes discussion of mortality, evokes concerns of rationing and “death panels” that are an anathema to those who are profoundly uncomfortable with the concept of death in the first place. (The Obama Administration has worked hard to clarify that the proposed legislation would merely provide an option for end of life consultation – covering important personal questions like whether terminal patients want mind-dulling medications administered to control pain. The measure is intended to ensure quality [more humane] care by compensating doctors for time spent providing therapeutic counsel, rather than perpetuating a system which disproportionately rewards performance of procedures.) The public outcry against a reform that happens to mention end of life considerations in the same reports as economic and political policies illustrates the impracticality of infusing Malthusian ideas into a debate around health care legislation.
Despite the unworkable role of Malthus in the health care debate, climate change, poverty, homelessness, and hunger remain salient realities of the modern world that seem to hint that the theologian was on to something. Even if there is no fixed carrying capacity of the world, as resources are stretched thinly, quality of life falls. It is evident that something must be done to address the growing distress of the cramped and hungry. Restraining population growth is obvious solution, but dictating life sentences or arbitrating life choices is an untenable (or at least unwise) way of doing so. Education and infrastructure seem to provide the best means of reigning in burgeoning populations around the world. Another or an additional “solution” (though temporary) is of course to find new means of allocating resources. Big Food corporations, such as Monsanto, are perhaps poised to achieve this by replicating the Green Revolution.
“The Economist” printed an interesting briefing on the Big Food giant a couple of weeks ago (I’d give the link, but the site is down). The corporation has no shortage of critics. Its vehement protection of intellectual property rights has disturbed popular conscience: independent farmers whose livelihood has been dismantled in courtrooms because they held onto a bag of seed longer than they were supposed to provide compelling victims of corporate glut and callousness (not unwarranted). Moreover, the American Antitrust Institute recently reported that the horizontal and vertical integration (that’s worth ten points, at least…) instrumental to Monsanto’s economic strategy has stifled, not promoted, innovation. The environmental ramifications of herbicides and the somewhat unsettling notion of crop genetic modification have also garnered opponents as well. Robert Kenner, the man behind the camera of “Food, Inc.” (which sharply rebukes Monsanto and endorses a McKibben-esque Deep Economy) repudiates the notion that feeding the poorest of the world mass produced, nutritionally valueless food that will make them more prone to sickness is a viable means of sustaining our world population.
Food crises around the world have in some ways succeeded in reorienting popular opinion that an extension of the Green Revolution (the “Gene Revolution”) may be the world’s best method of combating widespread starvation. GM crops have been shown to improve yields by adjusting for environmental or land based factors of growth and by enhancing crop resistance to pests and disease. Their image as the curative response to global malnutrition has, in some ways, been fostered by Monsanto’s approach to Africa. Learning from what it purports to be the fallible policies of the pharmaceutical industry, Monsanto has freely donated many of its innovations to developing countries there, touting the ideals of global unity. (Its products, one should note, are often specifically tailored for particular crops and environments and so seed used in Africa is unlikely to end up back in the US as competition for the company’s domestic business – Monsanto is still a vigilant guardian of its intellectual property at home). The world is beginning to rely on the innovations of Big Food: “Around 90% of the world’s 12m farmers with at least a hectare planted with GM seed are smallholders in developing countries.” The obvious question is whether these scientific solutions are sufficient to long address the systemic problems of excessive population. Many are unconvinced.
Sorry this is a little late guys…but I had another question for you all with regards to climate change. I had to read a paper for another class by Weitzman, where he challenges the findings of the Stern Report on climate change that we discussed briefly in class. Stern emphasizes an extraordinarily low discount rate…perhaps too low for Weitzman. There’s absolutely no doubt that the problems that could arise from climate change are incredibly real, and here’s how Weitzman assesses the Stern report:
He contends that a) the growth rate of our consumption as a species is incredibly uncertain and that global temperature changes can be both instantaneous and its hard for us to figure out how big they’re going to be. These two factors contribute to some change of catastrophic outcomes if we choose to do nothing on climate change. Weitzman ultimately finds that the real likelihood of catastrophe is small so why are we using this low fixed interest rate? Essentially, we’re paying a really high premium on an insurance policy that has a low likelihood of being used…climate change is real, but the direct costs of catastrophe are small. I tend to disagree with this kind of reasoning and see it as more in line with the Lomborg view of the world–that we are spending way too many resources and political capital on climate change that could be used for other more “immediate” issues. An interesting thought though
In case anyone is interested:
I was particularly interested in Rodrik’s analysis of globalization> According to him globalization and free trade won’t serve development goals unless there is some kind of government intervention to redress its perils and to protect those who are not prepared to compete in the international market. I think Rodrik’s lucid vision is inspiring because it serves to reminds us again about the dangers of assuming development work in only one direction: liberalization. The Washington Consensus is dangerous because it presupposes economic rowth will be distributed evenly in society, when in fact it is only those who are capable of ripping the economic opportunities provided by the integration of markets who will favor globalization. Although the story for Europe is quite different, since they have been historically devoted to the strengthening of the welfare state and to fight inequality as one of the fundamental goals of the state, the situation is much more complex for less developed economies. In Latin America, for example, we were practically surprised by the liberalization of markets, and we were not prepared, neither institutionally nor socially to face and benefit globalization. We passed from an import substitution model in the 80s to drastic liberal reforms, that yes, have allowed as to increase our growth rate, but that have not had a positive impact of development indexes. Globalization will only be beneficial for those who already posses the skills to actively participate in the global market (i.e. education, technology, language proficiency). For those who do not posses these skills, globalization will only provide the possibility of an “industrial job” that as Krugman says, will provide income, but at the expense of the physical and mental health of the workers. I can only speak about the Peruvian experience, but I can’t really see how globalization will bring development to our country, since we do not have a strong welfare state, neither strong industries to spur growth and reinvest profits in our country—which is a necessary condition for development. Most MNCs in Peru are related to the mining sector, and thus globalization for us basically means subsisting thanks to our natural resources. Can this be considered sustainable development? Certainly not. Globalization requires our economy to move from the industrial sector to the tertiary sector, which is precisely what the most globalized economies have done (i.e. Belgium, Austria). But without the necessary government spending to provide general education and opportunities to out citizens, and to empower them to become active members of the economy, I don’t think globalization can solve our woes. Without either a strong industrial or tertiary sector, I believe globalization will be another dead end for us.
Logan brought up the climategate controversy which I have (of course!) been following very closely. As usual, there have been a range of media interpretations, most of them incorrect or biased. Some just say that the CRU was hacked, that it was illegal, and do not mention the shocking contents. Of course this ignores the real issue, and besides it’s likely the files are FOIA actionable and that the hacker would get whistleblower status. Global warming deniers and misled media outlets have taken quotes out of context trying to disprove GW. Quotes such as “completing Mike’s [Michael Mann the hockey stick graph creator seen in Gore's movie] nature trick to hide the decline” are used to try and assert that the warming is not real. This quote refers to replacing tree-ring proxy data for temperature with instrumental temperature data after 1960 because the proxy data showed a decline. The divergence between tree ring proxy data and the instrumental record has been openly discussed in science journals. However, the hockey stick graph used in Gore’s movie and other publications deletes this divergence. So this quote doesn’t really change any of the science or knowledge about the historical temperature record, although it does show that scientists intentionally presented data to the public in a way that would best make their point.
There are lots of quotes about working to suppress the work of skeptics such as Richard Lindzen at MIT. There are quotes celebrating the death of other skeptics. The emails give a general impression that these are biased people engaged in what sounds like tribal warfare rather than the pursuit of knowledge. They celebrate a well known skeptic, Roger Pielke Sr, resigning from his position on Chapter 6 of the IPCC 2001 report in protest because his opinion was being ignored and overruled. The people engaged in these emails are famous climatologists, like Michael Mann, Phil Jones, Keith Briffa, and James Hansen, which would be standard reading for any class on climate change.
One of the most interesting quotes is Dr. Trenberth saying “We cannot account for the current lack of warming and it is a travesty that we can’t.” This is one of the points I brought up in our discussion, the lack of warming for the past 12 years. This has not been acknowledged as anything unusual by most climatologists, and a NYT article published 6 months based on a peer-reviewed journal article argued that the current lack of warming is perfectly expected. So it was interesting to see climatologists discussing the lack of warming behind closed doors.
If we can’t account for the earth’s energy balance in the short term, how can we possibly expect to do so in the long term?
One of the biggest personal problems in challenging AGW orthodoxy for me has been the fact the majority of authorities on the subjects, including the vast majority of scientists and research institutions, endorse the IPCC position. These emails, in revealing personal biases and animosity, suppression of other viewpoints, and distortion of data, went a long ways in explaining how the majority of the scientific community could be mistaken.
My post is coming quite late, but I figured I’d send it in anyways. I want to piggy-back of the ideas of Spencer and Jesse and think more about Malthus. Reading his writing was a bit sickening in how easily he promotes the complete abandonment of the poor because in most cases, it isn’t their fault at all that they’re poor. I think a lot of his debate, as well as looking into the future, is about looking to the past as well. Because my grandfather was able to pull himself out of poverty and amass wealth, I have always lived a comfortable life. I have probably done much less in my life to work to sustain myself than most people in poverty. According to Malthus though, I deserve to have what I do because of my ancestors, and they don’t because of theirs. Should we really be held accountable for the status that we’re born into?
There is definitely a “tragedy of the commons” when it comes to child birth. Just this time, instead of talking about how many sheep we’re going to have graze on the pasture, the question is how many children you have living in the world. If everyone had 2.1 (I think it is, since some children won’t grow up to have kids) kids, we’d be at sustainable population levels and everything would continue at the current level of production.
I can’t really believe I’m saying this, but I think that that cap is actually fair. Everyone would get to have 2 kids (a much better proposition than denying the poor any). But I suppose it just might be that someone’s third child would have saved the world and we’ll never know his or her insights because we didn’t allow his or her parents to reproduce a third time.
Although I don’t think we’ll get to a child cap in the near future (China’s authoritarian laws wouldn’t fly in most places), I think that we’re going to need something, at least eventually. I do believe that there is a strict carrying capacity of the Earth. At some point, we could figure out how to cover the entire planet with agriculture, but that would still only create a limited number of food. I also don’t think we should keep pressing the limits until we get to the final, unpassable point. That would be chaos.
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