31 Aug 2017

Protecting groundwater and reducing pollution in India

KA writes:
In developing countries which there is a constant struggle between farmers and utilities over water allocation, most of implemented policies are based on punishment. For example, quotas are assigned to each farmer and if he goes over his quota he will face a sort of a punishment. With this setup, if famers find a way not to be caught they will be the winner and they can take water as much as they want. Nobody makes money by saving water and the one acting responsibly in their consumption will be victims; because the others are being awarded by screwing the system. I strongly believe unless we find a mechanism in which people make money by saving water, no other effort matters.

In my last trip to India, I learned of such a mechanism to protect groundwater. Tushaar Shah (of IWMI-TATA and a well-known figure in the energy and water sector of India) has started a pilot in Gujarat called SPaRC. He is giving farmers solar power system to operate their pumps. The farmer can sell his extra power to the grid and make money. Nominal power of the solar system is a bit higher than the nominal power of the pump. Also, any farmer by subscribing to the program loses his connection to the grid so that he can only evacuate solar power into the grid and not get any electricity from the grid. A farmer can either operate his pump or sell the power to grid; as he expected now farmers participating in the program are voluntarily practicing water saving methods because the solar power they sell to the grid for money is also power NOT used to pump water.
Read more about the projects in this and this PDF.

29 Aug 2017

Review: In Our Hands

Charles Murray wrote this short, clear book in 2006 [free PDF], and I downloaded it to see what a "libertarian conservative" (he thinks many government welfare programs are ineffective) had to say about basic income. (Guy Standing, an intellectual on the left, has just released a new book in favor of basic income.)

Right off the bat, Murray is different from Standing et al., since Murray would only provide basic income to people "poor enough" to qualify (up to roughly $30,000 per year of income in the US), as he sees the main goal of a BI as a replacement for ineffective programs run by myopic bureaucrats. Standing and others (including me) support a Universal Basic Income (UBI) that goes to everyone (I prefer citizens over 18 years old, but that's a side debate), regardless of their earnings.

The benefit of UBI over BI is simplicity and reliability, as there's no need to keep any records of earnings nor fear of losing BI due to a change in circumstances. Murray might concede this advantage because he spends a lot of time trying to explain (and justify) the removal of BI as people earn more. I think he tries to defend that choice as a means of preventing sloth (more below) and making the system "affordable," but I think he's mistaken on the latter, as there's no difference between a UBI that gives $10k to a rich person whose gross contribution is $90k (thus $80k net) and charging that person $80k because you know how much they make. It's much easier to give UBI to everyone and then pay for the program by taxing wealth or pollutants (such as GHGs).

(Murray assumes the current tax system would be used to fund BI, but he misses a great opportunity to switch from income taxes -- which discourage work and are hard to track -- to property taxes that would still be progressive but are easier to implement. Such a switch would actually affect rich people, so it may be impossible in countries where the rich control politics.)

Turning back to thresholds and earnings, Murray is eloquent in his defense of BI as a means of helping people choose jobs that better match their skills (rather than those that pay more) as well as how BI -- by ending many government welfare programs -- would allow civil society to step back into its role of taking care of the needy, a role that was crushed by the massive expansion of US programs in the 1930s and much of Europe after World War II. That said, Murray and others such as John Cochrane worry that people who have "no reason to work" will form a permanent, unproductive underclass. Although I see the potential for such abuse, I think they would be trivial (just as the "Welfare Queen" that Reagan complained about was a one-in-a-million scammer). Although we may never agree on whether free money will create more problems than it solves, the current wave of (U)BI pilot projects will help us understand whether it enables or undermines human flourishing.

Now, back to the book. Part I describes The Framework, i.e., design, eligibility and funding in two short chapters. Part II discusses Immediate Effects on retirement, health care, poverty, the underclass and working (dis)incentives. Part III covers The Larger Purpose, i.e., the pursuit of happiness, vocation, marriage and community. The book concludes with some useful appendices where Murray goes over the details of how his BI proposal might affect US Government finances.

In Part II, Murray presents the debate for and against paternalism with respect to retirement and health care, stating his support in favor of people's freedom to manage their retirement options (with a risk that they may go bankrupt) while endorsing mandatory payments towards health services/insurance. Regarding retirement, Murray follows the classical libertarian guideline of trusting people to look after themselves better than bureaucrats, while allowing for their ultimate safety via a means-tested BI. On health care, he sees mandatory health care payments as necessary to protect people from uninsured risk but also as a means of using consumer choice to increase competition and efficiency. I agree with both of these positions.

In the next three chapters, he talks mostly about how BI will make it easier for "the poor" to change their lives (and neighborhoods), take responsibility for their actions (absentee dads can't claims they have no money to support their kids), and look for work without fear of losing unemployment insurance immediately. I also agree with most of this discussion, but I think UBI is superior because it's easier to administer and admits citizens based on their membership in a society ("American") instead of a class ("BI poor").

John Cochrane thinks that we should make it hard for people to collect BI to save money. I think we should make it easy to collect UBI, as a means of helping the least able get a break. (It's widely known that the wealthy are much better at collecting "their due" -- as Mr Trump implied with his "I'm smart" response to the observation that he pays no income taxes.)

In Part III, Murray attacks the "Europe Syndrome" of short working hours, unwedded relationships and a collapse of church going, which "explains why Western Europe has become a continent with neither dreams of greatness nor the means to reacquire greatness" (page 86). I repeat this groundless  critique to set up Murray's "three active raw materials for the pursuit of happiness... intimate relationships with other human beings, vocation, and self-respect" (page 90). I don't know about your experience of Europe versus the US, but I can surely say that I see a lot of intimacy, vocation and self respect in the Netherlands, most of northern Europe, and many other places in southern and eastern Europe. Indeed, Murray seems to be living in a Fox-news-inspired bubble of life over here:
Europe is especially useful as the canary in this part of the coal mine. Government regulation has made the costs of hiring an employee so high, and made it so hard to dismiss an employee, that the European labor market has become rigid. New jobs are scarce, and long-term unemployment is high. So an employee who has a job he hates nonetheless will tend to keep it rather than quit and look for a better one. European peasants used to be tied to the land. In this new version of serfdom, European workers are tied to their jobs. A major strength of the American economy is its history of high labor mobility. (page 96)
These sentiments are more cliché than true when you factor in two-tiered labor contracts in Europe, the value of job security to employees (and banks!), and higher minimum wages (vs employment at will and $2.13/hour for restaurant workers in the US), and how Europeans can work in 28 (soon to be 27!) countries. From the US perspective, Murray needs to look further into "occupational licensing" (a libertarian bugbear), the concentration of market power in larger firms, and how mortgage debt and fear of losing heath insurance have reduced mobility for American workers. Perhaps he was accurate in 2006, but not today, where the US is in 16th place in terms of employment rates, at 70 percent of the potential workforce.

Putting aside his ill-informed beliefs about Europe, Murray is right to focus on happiness via relationships (choice of partners and friends), self-respect (freedom to work in low wage but interesting jobs) and community (working with neighbors rather then living with state interventions).  BI (or better, UBI) could increase happiness without disrupting US or EU culture.

So why don't we have (U)BI? Murray and I agree that politicians like spending other people's money on programs they design and control. Besides inviting corruption, such hubris is also doomed to fail in the face of our individual and collective diversity, which is why UBI (or "selfie-welfare") is so much more promising as a way of letting people best help themselves.

Murray is perhaps most eloquent and passionate when he turns to the power and value of community in giving us support and identity, and he is right to point out how the centralization and growth of the US Federal Government in the 1930s under FDR really undermined the power of one of America's best institutions -- the voluntary association, as memorably described by De Tocqueville (1835):
Americans of all ages, all stations in life, and all types of dispositions are forever forming associations. There are not only commercial and industrial associations in which all take part, but others of a thousand different types—religious, moral, serious, futile, very general and very limited, immensely large and very minute. Americans combine to give fêtes, found seminaries, build churches, distribute books, and send missionaries to the antipodes. Hospitals, prisons, and schools take place in that way. Finally, if they want to proclaim a truth or propagate some feeling by the encouragement of a great example, they form an association. In every case, at the head of any new undertaking, where in France you would find the government or in England some territorial magnate, in the United States you are sure to find an association.
And what could undermine these associations? Murray quotes De Tocqueville again, who had indeed seen the danger of intervention by a (well meaning?) state:
A government could take the place of some of the largest associations in America, and some particular states of the Union have already attempted that. But what political power could ever carry on the vast multitude of lesser undertakings which associations daily enable American citizens to control?... The more government takes the place of associations, the more will individuals lose the idea of forming associations and need the government to come to their help. That is a vicious circle of cause and effect.
I can't help by agree with Murray's point here, just as I see UBI as a convenient way to protect the safety net that most of us take for granted while encouraging people to re-engage with their communities that can -- and should -- find local solutions to suit their local problems.

Returning back to the politicians who are most likely to oppose UBI,* I think that UBI offers an opportunity to break the ideology- and corruption-fueled deadlock of Washington DC that is turning the US into "the sick man of the developed world." If all Americans agree that Congress is a mess (20 percent approve; 74 percent disapprove), then perhaps it's time to stop fighting for control of Congress (and further wreckage) and start fighting to take power from Congress. UBI would hit them where it hurts -- their corruption-prone laws, regulations and give-aways.

Bottom Line I give this book FOUR STARS for its clear and thoughtful exploration of Basic Income. Read it, and then decide on what (U)BI would work for you and your community. It's time.

* I mentioned an idea to "empower" students at my school by giving them more choice on how their funds were spent on their behalf by (our version of) the student council, but both councilors who I approached disliked the idea "as it would leave us with less money to manage, so we don't think they know how to spend the money."

For all my reviews, go here.

24 Aug 2017

Lead poisoning, gasoline lobbies and crime

Most of you have probably heard how the residents of Flint, Michigan were exposed to unhealthy levels of lead in their water (actually, any level is considered unhealthy) due to political and managerial incompetence.*

Then I read this article on the "lead-poisoned generations of New Orleans," which pointed out two things. First, there's a very heavy correlation between lead poisoning and poverty, i.e., the poor are exposed to more lead in their air, water and earth than the rich due to where they live, the jobs they work, their lack of access to public health clinics, and their relative lack of political power.

That article linked to another, fascinating one about Clair Patterson, an eccentric genius who fought a (mostly) lone war against the gasoline industry from after WWII until lead's poisonous effects of people were pulled back by changes in US air quality regulations (e.g., removing lead from gasoline) that began in the 1970s but were prevented by industry lobbying from reaching their end point until 1995. (In the meanwhile, another generation of children inhaled lead at levels linked to permanent brain damage -- and lower IQs.**) That long article is worth reading for its industry villains, the academic who took a big salary to work for industry, and the generation of environmental scientists spawned by Patterson's work.

There are two lessons from these stories. The first is that we've known about lead's negative impacts for a long time, as this excerpt from the Patterson article demonstrates:
The Romans mined 18 million tons of lead between 200 BCE and 500 CE, much of it for pipes. All this time, they were aware of lead’s dangers. The Roman architect Vitruvius begged officials to use terra-cotta instead. "Water," he plead, should “on no account be conducted in leaden pipes if we are desirous that it should be wholesome.”
The second is that industry will fight regulations to limit their use of lead, as alternative substances cost more (not a lot more, just more). That fighting is not just worrying from a public health and development perspective, but also from the perspective of those children who are permanently damaged by lead in their blood and soft tissue.

Even people who haven't read Freakonomics have probably heard of Steve Levitt's claimed correlation between the right to abortion and violence, i.e., that legalized abortion post-Roe v Wade meant that fewer unwanted children -- and thus fewer would-be criminals -- were born after 1973. Although I have always been skeptical of this claim, I was pleased (in a sad way) to find a much better correlate -- and perhaps causal driver -- of violence and the fall in violence: lead in the air (see figure).

This article goes through the lead-crime hypothesis, and explains why (1) crime has dropped radically in the US since the mid 1990s (programs to reduce lead began in the 1970s and it takes 23 years for kids with intelligence and behavior problems caused by lead to "hit the statistics") and (2) why crime has not dropped by as much as it could: ongoing exposure to lead in polluted soil and water. Who's most exposed? The poor people put in public housing, as also discussed in the first article above.

Most European countries banned lead from industrial products in the 1940s. The US lagged by 40 years due to industry lobbying (and political corruption and/or naiveté). That's two generations of brain damage, criminal activity, and poor health --- two generations sacrificed to add a few bucks to industry profits.

Seriously, Flint water managers probably saved $10,000 in the course of inflicting $1 billion in harm to citizens, children, trust and the city's water system. That's a benefit:cost ratio of 1:100,000 against, but the benefit was to the city's budget and the cost fell on citizens and taxpayers "bailed in" by politicians eager to do something after it's too late.

(Meanwhile, the Trump Administration's incompetence and ideology has led to further delays in an EPA rule on lead in drinking water.)

Bottom Line: Some of our biggest social problems are the result of government failure (industry lobbying plus political corruption), not the individuals who find themselves living with less brain development due to conditions beyond their control. Don't be naive when a lobbyist says "can't be done" -- look and see what others do around the world, and then see what has be done.

* Untrained managers saved $100/day on chemicals that would have neutralized the corrosive impact of Flint River water, thus preventing the removal of deposited minerals that were separating flowing water from the lead in pipes. In my original blog post on this massive failure, I suggested that the people of Flint relocate -- by entire neighborhoods -- to Detroit. I still think that's better than the $millions that will be spent on a city with a dim future...

** I remember the phase-out of lead, as I had an old car that needed "supplements" to run with unleaded gas. I also wonder how much lead damage I sustained as a kid growing up in the 70s.
Addendum: Cross-posted to 6 Degrees with pleasure :)

23 Aug 2017

Do not help China censor its people's future

This angry letter from a Professor to Cambridge University Press is a masterwork in the dangers of (self-)censorship. You should read the whole thing [pdf backup], but here's an excerpt:
But the still greater concern is that if China Quarterly and then other journals published by Cambridge (such as the Journal of Asian Studies) — powerful institutions with global clout, not vulnerable individuals — just go along with this request to censor scholarship on these topics, will scholars inside or outside China still be eager to work on Taiwan, Tibet, Xinjiang, the Uyghurs, Tian’anmen, Taiwan independence advocates, Liu Xiaobo, the Dalai Lama, Chinese dissidents, Falun Gong and so on? Or will they chose safer subjects? And how should the people who are the subject of these articles feel about Cambridge’s decision to airbrush them from the record? CUP may hide behind the excuse that this is a “pragmatic” decision to preserve “Chinese” access to its less sensitive material, but who the hell gives Cambridge University Press the right to decide that Tibetans, Uyghurs, Hong Kong activists and dissidents of all sorts are less worthy than other content? It is noteworthy that the topics and peoples CUP has so blithely chosen to censor comprise mainly minorities and the politically disadvantaged. Would you censor content about Black Lives Matter, Mexican immigrants or Muslims in your American publication list if Trump asked you to do so? So why do you think it’s fine to cut the oppressed and disenfranchised out of China Quarterly?
Related: A Russia watcher on why the Russians are so passive (and accepting) of Putin's control. I don't think the Chinese have this mindset, which is why I have hope for their future development (via democracy and local power)

Links of interest

  1. Reconciling Hayek's decentralized emergent order with centralized government and firms
  2. Amsterdam takes action against bike sharing renting companies that park their bikes on the crowded streets. They should pay rent, if they are using the streets to make money. Amsterdam is also planning to register Airbnb hosts, to enforce the regulation limiting rentals to 60 days per year. That's a good idea, given that 40 percent of Airbnb hosts exceed that limit.
  3. The IMF's opinion of the US is not good "the sick man of the developed world"
  4. Will Trump allow a USGov't report on climate change to be published?
  5. Will AI "take over the world by accident" like capitalism?
  6. Natural systems coordinate in similar ways to markets
  7. How Putin runs his mafia state (testimony to US Senate) and how "illiberal" democracies are really just one-party kleptocracies (Russia, Turkey, Venezuela, Hungary, et al.) and how Russian assassins work freely in the UK
  8. It's good to see auctions to supply renewable energy replacing feed-in-tariffs. Prices are dropping quickly with competition :)
  9. Americans would drive 16% less if parking wasn't free
  10. "Is marriage worth it?" More women with more choices are saying no. 

22 Aug 2017

Review: Water Capitalism

I was sent a review copy of this book on the request of its authors, Block and Nelson (B&N), and its provocative subtitle ("The case for privatizing oceans, rivers, lakes and aquifers") intrigued me.

Sadly, the book is far more of a libertarian rant in favor of private property and against government regulation than is justified by the topic: water.

In this review, I will go over the (fatal) weaknesses in B&N's argument before spending some time directly responding to their interpretation and analysis of "my ideas" from my 2011 book, The End of Abundance. I will pursue this two-part strategy to give their book its due, but my criticisms may apply to both their book and their interpretation of my book.

Their book begins with a charming quotation associating the authors and their readers with "those maniacal mariners who have revolutionized society in ways that the pertrified toe-dippers of the world never believed possible" and goes on to invite the reader to join them on a "wild ride."

Sadly, that ride appears to take place on a fantasy road, rather than the roads of reality, as B&N appear to totally ignore the fundamental nature of water in oceans and rivers (and to a lesser extent in lakes and aquifers), i.e., the non-excludable nature of water as a common pool or public good. Now B&N clearly understand that difference, as they propose to privatize those commons, but they have (1) very little to say* about the "transactions costs" of converting the ocean to a private good (the term doesn't even appear in the index), and (2) nothing to say about the "global authority" that would be necessary to implement and enforce such a plan. (Actually, they do claim that "courts" would enforce the plan... and suggest the Better Business Bureau and American Arbitration Association (p 22). I'm kinda doubting those organizations have jurisdiction over the Pacific Ocean or that the BBB or AAA would stop the Chinese or Canadian navies from taking "private water" by force.)

Just over a year ago, I wrote "When to rely on markets and when politics?" to clarify that goods that are non-excludable (due to high transaction costs and/or lack of enforcement of property rights) need to be managed with that characteristic in mind, but B&N think that's unnecessary as they try to put square pegs into round holes. (They do engage a bit with Ostrom's work on managing common-pool good, but Brock seems reassured by his earlier criticism of Ostrom, i.e., that the only way to address the tragedy of the commons is by privatization, i.e., making common-pool goods excludable.)

Let me note here that I am happy to consider changes in property rights as a means of addressing water mismanagement (see my paper on giving property rights in national water to citizens or this one on auctions for water [pdf]), but those "solutions" work with -- and depend upon -- political interventions. They cannot work from a pure laissez faire perspective. See below (on my book) for more on why all or nothing solutions such as B&N's are oversimplified.

A few details from their writing will help you see just how naive some of their claims are:
  • "18 billion more people could live on our planet if we could privatize the seas" to allow private production on water (page 3).
  • The water cycle should not impede privatization just as the land cycle (volcanoes, erosion) does not stop privatization as "a cycle is a cycle is a cycle" (page 5).
  • Privatization of the oceans will "end the epoch of 'non-restrained fish migration.' They will have no more liberty to travel than do barnyard animals" (page 7).
Each of those claims will attract criticism, but they are stated as if uncontroversial. Looking for more? How about "Who will rightly own the rivers, lakes and oceans. On what basis will property rights in these bodies of water be distributed? It starts with the Lockean principles of homesteading" (page 9). Although  I am pretty sympathetic to the tragedy of the commons that affects, say, the migration of Atlantic tuna, I am pretty sure that such a move to homesteading would (1) reward might rather than right and (2) entirely ignore the nature of oceans as a shared -- not private -- good.

Just a month ago, Tyler Cowen said that I was a "conservative intellectual" when it came to water policy (due to my support for pricing, property rights, etc.), so it's not exactly hard for me to understand B&N's libertarian perspective on privatization, but I reject those perspectives as both unrealistic (no political support) and ineffective (managing a non-excludable good such as migrant fish or the water cycle as if they were private). Going further (on might over right), I have to say I have my doubts that homesteading wouldn't just be another land water grab by colonial types disinterested in the traditional uses or communities that colonizers exclude from "their" land sea.

Moving onto chapter 2, I noticed that B&N appear to separate the world into "individuals with private property," government ownership mismanagement, and the commons of non-ownership. What's missing from this list is community ownership, which they -- I think -- mistake or confound with Soviet communism, especially when it comes to their examples ("suppose that t-shirts were all owned in common" page 16). This example betrays a total incomprehension of the difference between an excludable, rival good (a t-shirt) and non-excludable, non-rival good (the ocean), which means that nearly every parallel assertion they make in terms of efficiency, tragedy and so on is just wrong. It's with these kinds of basic errors in mind (perhaps common when few economists study non-market phenomena) that I quickly tired of B&N's provocative but entirely unworkable ideas.

For example, they claim that "chaos and government control" are the only alternatives to privatization when it comes to managing a community lake (page 16). It seems that they have never heard of a club or other organization for such a task. A pity.

For example, they say "markets outperform state services in all times and places..." (page 17) but that claim is falsified by the existence, persistence and outperformance of legal and defense services over private providers. Yes, it may be better to have private guards in some US communities, but there are plenty of places in the world where the government's monopoly on force helps average citizens  prosper.

For example, they claim that competition among sewage and drinking water providers would improve innovation (pp 26-27). First, they entirely miss the fact that those systems are "natural monopolies" -- meaning their high fixed set up costs and low marginal operating costs makes entry -- and thus competition -- difficult.  Second, they appear not to understand that water utilities often combine public ownership with private cooperation and innovation. This kind of ignorance (or lazy ideology) really undermines any useful points that they might contribute.

For example, in discussing ownership, B&N say that "neither author subscribes to the riparian concept," which may be good when it comes to theories of the Tooth Fairy, but doesn't really matter when many people (billions of them!) do subscribe riparian regimes where one person's use is allowed as long as that use does not harm others. Seriously, that's why we think it's okay to have public swimming pools but not okay to pee in them!

Bottom Line: I give this book TWO STARS for collecting a number of libertarian talking points into one place for those interested in their perspective on privatizing water in the oceans and so on, but the book is fatally flawed by a failure to reconcile those claims with the reality of water, economics, politics or existing institutions.

* Try as I might, I had a very hard time reading more than a page without coming up with a few objections, so I did not read between pages 37 and 208. Although such an omission may mean this review is biased, I am pretty sure that the authors did not fix the mistakes and omissions of earlier pages -- let alone drop them entirely -- so I stopped reading as soon as I felt like I understood where they went wrong in their analysis. That stop also made it easier for me to relax again, as the book was far too aggressive in making unsubstantiated -- and therefore flawed -- claims about how their ideas could or would be implemented. I will add here that this "problem" of ideological blinders occurs with "progressives" as well as "libertarians" as the people at both extremes seem unable to recognize explanations or trends that do not fit into their narrow bias (corporate evil and government evil, respectively).

Now I'll respond to B&N's critique of The End of Abundance (TEOA) on pages 208-213 in their book. At first, I was flattered to attract their attention, but then I was disconcerted to see that they had not read my book very well.

In my book, I suggest "some for free, pay for more" pricing of residential water. B&N attack me as a central planner (linking to their essay critiquing central planning) without appearing to notice that pretty much all drinking water services, world-wide, are regulated as natural monopolies by the government (I discuss that fact extensively in TEOA). My some-for-free suggestion (updated here) is therefore structured to bring water to all people, cover system costs, reduce revenue volatility, and encourage conservation when water is scarce. Free markets may be good for providing and allocating t-shirts, but they suck for delivering drinking water. (You can read my papers on implementing water meters in the UK or a history of drinking water services in the Netherlands for more on those topics.)

Next, B&N get upset with my worry that the poor get screwed by bad water policies, saying "the word 'fair' sits uneasily in a book that supposedly offers an economic analysis of water scarcity. Zetland treads dangerously close to a conflation between the normative and positive here" (p 209, their emphasis). I nearly spit out my coffee when I read this sentence in their book, which is filled to the brim with normative ["what should be"] statements of libertarian excess. Indeed, I really struggled to find much positive ["what is"] analysis in their book, besides well-deserved, but entirely off topic, examples of how the Soviets were bad at producing private goods. Even more distressing is that B&N seem to have missed the entire second half of my book, which addresses the social water choices requiring political or community tools. Although I am clearer in separating and combining economic and social chapters in my more recent Living with Water Scarcity, it's awfully hard to see how B&N could have missed the need for (positive) political reality, let alone the importance of governance and communities in the political-economic perspective that gave birth to modern economics -- and to which many of us have returned as a means of pursuing better analysis and solutions. (B&N go on to make a number of claims that water can be managed like groceries, restaurant meals, and cable TV. I think they need to retake industrial organization.)

What could they possibly say next? How about "It appears in his view that feminism, of all things, can help water markets" (p 211) before quoting my words "In the early 1990s, the Indian government amended its constitution to require that one-third of the leaders and members of village councils be women... Villages where women had power had 60 percent more drinking water facilities" and responding with "what does this have to do with the economics of water? Shall we unleash women power on other industries, and expect the same beneficial results?" I'm not sure if B&N have ever considered how villages, cities and countries make decisions on spending collective (budget) money, but they seem not to understand my point -- that women with voting power used that power to fund water supplies -- in their haste to see a "free market in water supplies" that does not exist, at least not in those villages. It's around this time that I was asking myself if B&N aren't actually just trolling readers.

They go on to misrepresent Coase ("For Coase there are two states of the world. The zero transactions cost model and the realistic one where transaction costs are very high, higher than any possible gains from transactions" p 212). In reply to this, I suggest they read Coase's 1960 paper (again?), with particular attention to Section VI ("The cost of market transactions taken into account") as Coase was well aware -- and awarded the Nobel prize thereby -- of the third option in which transaction costs were material to choosing markets or regulation, but not so high as to block "any possible gains from transactions."

B&N repeat their mistakes in misunderstanding the nature of water by criticizing my policy proposal to limit consumption of scarce water (to conserve supplies held in common) or adding deposits on plastic bottles (to reduce litter in the commons). As noted at the start of this review, some goods need political or social management by their nature.

Speaking of political management, I will end by responding to B&N's final words on my book, i.e., "any free market credentials Zetland may have possessed are almost certainly vitiated by this embrace of his of communism" (p 215), with "this" referring to my agnosticism on private versus municipal ownership of drinking water utilities. As I say in the book -- they quote me -- and all the time on this blog, it's not ownership that matters when discussing a natural monopoly (again, a concept that B&N do not appear to grasp), but the quality of the regulator's oversight of that monopoly. There are plenty of examples of private or investor-owned firms abusing their market power or providing reliable safe drinking water services, but they do not do so in a free market like the one for t-shirts that B&N appear to think can work everywhere.

And with that, I lay down my conservative-communist pen.

For all my reviews, go here.

Addendum: I cross-post my reviews on Amazon all the time, and I was curious to see why my 2-star review averaged with a (one sentence) 5-star review resulted in a 3.5 star rating. It's because the other reviewer was a "confirmed purchase" from Amazon. I guess that's reasonable, if you assume that the only way to buy a book is on Amazon and that all outside reviews must be biased (but it's not!).

Thus, if you like this review and have an Amazon account, then click on the link for the book at the top and up vote ("helpful") my review, to raise its "weight" in Amazon's algorithm.

20 Aug 2017

Free speech (detailed explanation)

I'm a straight up First Amendment guy (you cannot define "hate" so don't ban "hate speech" -- let people argue in public), and this is the clearest you can get on free speech.
And here's the "hover addendum" that XKCD always adds:
I can't remember where I heard this, but someone once said that defending a position by citing free speech is sort of the ultimate concession; you're saying that the most compelling thing you can say for your position is that it's not literally illegal to express.
Now go argue instead of attacking people.

17 Aug 2017

Review: Reinventing the Bazaar

I think the title of this 2002 book by John McMillan (who died too early, at 56) refers to the need to reclaim the place of markets in the public's consciousness just after the Dotcom crash and Enron bankruptcy at the turn of the millennium. The book's subtitle ("a natural history of markets") may indicate how markets are natural in both their origin and function as well as their endurance through booms and busts that may "shake out" specific players, products or processes.

My interpretation of the name may be wrong, but the book certainly delivers a thorough and clear explanation of the forces within markets and the forces (especially government policy) that affect their formation and operation. It is with these characteristics in mind that I consider this book a much better introduction to economics than Freakonomics, for example, and a broader foundation to understanding markets than was given in Who Gets What and Why (although that's an excellent book).

(I will note here that the book does not focus on non-market economics central to understanding and managing common pooled and public goods such as those I often discuss here, but McMillan does provide contextual explanations of how markets can create negative externalities, cannot always regulate themselves, and so on.)

To give you a taste of the book, I will provide a brief comment or quotation for each chapter.
  1. The only natural economy: "The market is not omnipotent, omnipresent, or omniscient. It is a human invention with human imperfections. It does not necessarily work well. It does not work by magic, or, for that matter, by voodoo. It works through institutions, procedures, rules, and customs." McMillan's uses "natural" to point out how markets emerge from various behaviors while reflecting local conditions. You cannot make an artificial market unsuitable to those conditions just as you cannot prevent people from making a market to suit their needs.
  2. Triumphs of intelligence: Markets deliver incredible value with low effort by allowing people to trade, each to their own advantage.
  3. He who can't pay dies: Supply goes to those with money, so poorer people are more likely to die. This is not a fault of the market, which is efficient in a way, but a sign that governments need to get involved to help poor people (most usefully by giving them money; most harmfully by controlling prices of goods such as water, housing, or medical care).
  4. Information wants to be free: Competition reveals information about buyers and sellers, goods and services, and more information leads to better outcomes. (Regulation can lead to misleading information, as when industry "helps" draft regulations. The contents of gasoline and food are both regulated, but gas prices provide good information while food labels are misleading.)
  5. Honesty is the best policy: Repeated transactions build reputations that help honest market participants (e.g., fake reviews on Amazon, credit scores, branding, etc.)
  6. To the best bidder & Come bid!: Auctions match the cheapest supply to the most valued demand. McMillan was involved in the pathbreaking auctions of radio frequency spectrum, which have raised $billions for governments. (He points out that governments have cost taxpayers $billions by giving spectrum to political friends.)
  7. When you work for yourself: Property rights give owners an incentive to be more efficient and discover value. The Soviet Union's model of "something that belongs to everyone belongs to no one" fits in here, as does the lack of "ownership" in the environmental commons that results in water pollution and GHG emissions driving climate change.
  8. The embarrassment of a patent: Intellectual property rights can help but they can harmful if they are  too strong. (Listen to this podcast on pharmaceutical patents, for example.) China's Pearl River Delta region may overtake Silicon Valley as the latter's increasing reliance on patents interferes with innovation.
  9. No man is an island: Negative externalities from pollution, market power, etc. inhibit efficiency. McMillan ends this chapter with: "A workable platform for markets has five elements: information flows smoothly; people can be trusted to live up to their promises; competition is fostered; property rights are protected but not overprotected; and side effects on third parties are curtailed. For the remainder of the book I will look at how these five elements of market design get to be implemented -- or fail to be." (P135)
  10. In the next chapter (A conspiracy against the public) he says: "An intrinsic tension exists between the state and market. On occasions it becomes unhinged. The government has an essential role to play in designing markets. But intervention in markets has a downside, for governments cannot necessarily be relied up on to act as they should.... Government officials sometimes obstruct markets and profit from them by extorting bribes. They also on occasion help favored market participants to conspire against the public." Those last two sentences capture the essence of corruption ("abuse of public office for private gain"), which can involve stealing money but also promoting one's personal beliefs of what is "good" over what actually helps people. In the case of water, this includes charging too little for scarce water or system maintenance.
  11. Grassroots effort: A recap of the ideas best expressed in Hayek's 1945 paper, i.e., prices make it easy for disaggregated, uncoordinated participants to coordinate in a bottom-up manner that is faster and more efficient than in any top-down regime.
  12. Managers of other people's money: A recap of the ideas expressed in Coase 1937, i.e., the "boundaries between a firm and the market are determined by transaction costs." Corporations do not rely on prices to play a big role in markets because they reflect command and control management. They tend to do well when there are profits to be won or lost in competition with other corporations, but they fail when they are left to authoritarian devices...
  13. A new era of competition: Governments can create markets for goods such as pollution or spectrum. These markets will work (or fail) in accordance with the design's accuracy and completeness. McMillan describes how the US market for SOx worked, but California's wholesale energy market failed (taking down the governor with it).
  14. Coming up for air: Governments can suppress or create markets (e.g., Russia's 1990s shock therapy), but excessive speed may hinder participants and institutions from learning how to use markets, thereby undermining and destabilizing their function.
  15. Antipoverty warriors: "Poverty cannot be eliminated by sharing the wealth" (p 213), but growth must reduce inequality if it's to be sustainable. We've seen many (well-deserved) protests on this issue. Anti-globalizationists are right to worry about unequal growth, but they need to attack politicians, not market participants, for that fault. It's possible (easy, actually) to transfer some of the gains of growth to losers...
  16. Market imperative: Markets can help a community but not if one group advances at the expense (or without regard) for another. Markets have an immense capacity to help us help each other... "as if guided by an invisible hand" but markets do not exist in a void. Good policies are necessary to help markets serve the community.
Bottom line: I give this book FIVE STARS for its clear and thorough discussion of how markets work (or fail) in human societies around the world. Read it if you want to really understand why economists are often so optimistic about human progress... and why those who are pessimistic focus on social and political failures.
For all my reviews, go here.

15 Aug 2017

Reddit AMA on NOW

I will be doing an AMA (Ask me anything) on Reddit tomorrow (soon? next week?*) NOW, starting around 14:00 Dutch time (UTC+2). I've done five so far.

Potential topics:
  • Water scarcity, drought and floods
  • Climate change, adaptation and mitigation
  • The commons for cooperation and conflict
  • Travel and culture in different parts of the world
  • The war on drugs, darknets, cryptocurrencies
  • Bikes and cars, cities and people
So, please stop by here.

Tuesday funnies!

I'm getting better at having no idea of what I am doing...

14 Aug 2017

What have I learned after travel to over 100 countries?

I turned 48 today and figured that it's a good excuse to (finally) write up some thoughts on travel, culture and life. (If you just want to see photos, then go here.)

Last summer, I passed the 100 mark in terms of countries that I've visited in my life.* My first trip outside the US was a post-university "grand tour" of nine European countries.

Long ago, someone asked me what I'd learned after traveling for some time, and I replied that "people love their children." This seemingly trivial observation still stands as a good starting point, as it captures the similarity that dominates our differences in history, language, culture, etc.

I could tell you stories about the Iraqi who cried to me and my friend about their families when we met in Yemen in 1997. Or show you photos of the Mongolian father holding his tiny baby while he sat on his horse. Or of the Belgian kids playing in the fountains in the sunshine.

From this starting point, it is not so hard to see that most people are worried about themselves and their lives, not you. That fact makes it easier to travel to places, as most people don't care if you are there. Some may be curious (the more remote places), and some may be needy (the more touristy places), but most want to leave you alone as they want to be alone.

That said, there are many people who have a more difficult life than me (or any tourist), pretty much by the definition that I have the means to visit their country and they usually do not. That difference in means is usually no reason for them to be sad (I forbid my students from saying "poor and miserable"), as happiness is often a subjective emotion that combines current condition and future hope. Food, water, shelter and family in present circumstances and some hope for work, learning or advancement is often adequate for an average human to feel happy. It's the current deprivation or future hopelessness that gets people down -- as we see with people fleeing fascist or collapsing countries or Americans turning to crack or opiates to try to escape their poverty and helplessness.

What I enjoy about travel is exploring and understanding how different people address the various  problems and constraints arising from geography, history, culture or economy. How do they build their houses, get water, move, rest, play or worship? How do they live with their weather, flora and fauna? I've slept on the annoying pebbles on the shores of the Dead Sea, tossed and turned with cold and altitude sickness in Kenya, sweated through the night in India, and licked the salt walls of a salt hotel in Bolivia. I've eaten with my hands, chopsticks, hot bread and even out of the hands of beautiful Ethiopian scammer.

My main goal when traveling is not to uncover the exotic but to see -- and perhaps understand -- how different people make do and succeed in their lives. In most cases, this involves work, money, family and success, but the means and methods vary with the starting point, resources and expectations. The variety of these paths and intense energy with which people pursue them is truly fantastic to consider. One reason I liked going to Burning Man was that it captured a distilled essence of human curiosity, creativity and compassion -- energies that I have experienced hundreds of times in various squares, bus stations, markets and cafes.

I decided not to have children around 2000, as I felt that my life was complex and rewarding enough without them, but a childless life leaves you with the question of what else to do. After five years of continuous travel (1995-2000), I had decided that I had too much "consumption" and not enough "production," so I stopped and returned to work and eventually studied for a PhD. I had begun with a goal of understanding "development economics" (i.e., why some countries grow rich and others do not; what it means to be civilized, etc.) but turned to resource and environmental economics when I got into water. My early interest has not gone away but added to my study of the water and the influence of institutions, politics and society. My travels before, during and since graduate school have complemented book ideas with the reality of the road. I don't see any reason to stop traveling, learning and meeting new people.

What about climate change and travel?

We debate while the world burns (Science museum, Tokyo)
I would be pretty bullish on the future of humanity -- even with people like Trump and Putin around -- if it wasn't for climate change (CC), which promises to take away a number of really helpful "ecosystem services" that we have taken for granted. I doubt that CC will lead to human extinction, but it's definitely going to increase the cost (and thus reduce the quality) of our lives, no matter where we live or how rich we might be.

The real solution to CC is a reduction in greenhouse gas emissions, but such mitigation will not happen voluntarily ("tragedy of the commons") and has not happened through a binding international agreement (The Kyoto Protocol was abandoned too early -- probably because its cap and trade mechanism depended on the politically-devisive need for rich world polluters to send money to poor world victims.) It's under these conditions that I have decided that there's nothing for me to do about my travels, meat eating, etc., as action on my part will not matter unless it is part of a group effort to overcome free-riding. Cooperation on a planetary scale is quite a challenge (we can't even fix daylight savings time), but I'm available if the Galactic Council asks for advice (short answer: carbon taxes).

How about some travel advice? What's changed over 27 years that you've been traveling?
  • Some people don't like to travel or want a beach resort. Others "go native" in a village for 4-5 years. Don't get bothered if someone's style is not yours (unless it's your partner!)
  • "Homesickness" depends on how long you plan to go. If you say 2 weeks, then you start to think of home after 10-12 days. If you say 4 months, then it's after 3.5 months. 
  • It's more fun to travel over land to appreciate the changing scenery and culture, rather than fly in and out. In my overland travels from Europe to Asia, I got a lot more accustomed to gradual changes than I did flying in and out of Latin America in 5 separate trips. (It's also cheaper not to fly, but most people lack the time...)
  • I began when communications were via expensive phone and slow mail. Now people have wifi and continuous status updates. In the old days, travelers would talk to each other and do things together. Now they are usually staring at screens and searching Yelp for restaurants. It's quite sad to see this "low intensity, low immersion" travel, but the locals are doing it too. 
  • As I get older, I prefer to have accommodation booked in advance, as that saves confusion on arrival and money/negotiation on costs. It's still best to travel with a back-pack (mine is a 70 liter water-everything-proof bag) rather than "wheelie" bag to (1) carry less and (2) carry easier.
  • The best way to see a city is to walk around and follow whatever is interesting. Guidebooks can be fun, but they take time to digest and sometimes mislead you with too many "well worth it" recommendations.
  • I find it's harder to revisit a place, as "we" have both changed and may not get along as well as  last time. That said, there are plenty of cities (and countries) that deserve to be explored in layers. Just don't get your hopes up that Paris will taste the same as it did when you were running down the Seine one dark night with a new friend and bottle of wine!
  • Personal recommendations are still the best way to find restaurants, fun neighborhoods, etc.
  • Everyone has their own risk-profile. Most risks are of the unknown, but some are foolish or dangerous. That said, your "nose for risk" will be keener when you've been in country for longer, know more locals, and have heard more stories. That said, most people are just as worried about you as you are about them, so chill out, trust your fear and take some chances.
  • When you're on the road for awhile -- backpacker style -- then you will meet lots of people. Some of them you talk with over tea; others may be travel or cuddle buddies. Many you will never see again. That's not a bug but a feature: it's handy to be friendly with strangers. You can have deeper relationships when you're likely to see the person multiple times per year (i.e., where you live).
  • The best part about talking with strangers is that you can take the time to understand them. People these days are too quick to criticize others because they use social media in a rush -- which sucks for understanding -- rather than talking face-to-face over a few drinks. Try the old school method. (If you do it in bar or cafe with a stranger, then make sure you remind them you're not a serial killer but actually in the place to chat with others!)
  • Travel in the countryside either involves walking (trekking in Nepal), transport (riding atop a Pakistani lorry), riding (to the Kyrgyz highlands), or driving a car (and getting stuck on the wrong road to the hotspring in California). I prefer cities (and walking) because there's more human density, but it's also nice to really get into nature some times.**
Bottom Line: I've enjoyed travel for the insights and knowledge it has given me about myself and the world we live in. People are amazing in their kaleidoscopic variety as well as their shared humanity. We could all live a little easier if we valued and respected people (and the environment that sustains us) as much as we value our lives at home.

* Here they are! Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Belarus, Belgium, Belize, Bolivia, Bosnia and Herzegovina, Brazil, Brunei Darussalam, Bulgaria, Canada, Cambodia, Chile, China, Colombia, Costa Rica, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, El Salvador, Eritrea, Estonia, Ethiopia, Fiji, Finland, France, Georgia, Germany, Gibraltar, Greece, Guatemala, Honduras, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kenya, Kyrgyzstan, Laos, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Madagascar, Malaysia, Malta, Mexico, Moldova, Monaco, Mongolia, Montenegro, Morocco, Myanmar, Nepal, Netherlands, New Zealand, Nicaragua, Norway, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syrian Arab Republic, Thailand, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Viet Nam, Yemen

** It's not like Nature is trying to kill you, but "survival of the fittest" is a thing. As humans, we have the tendency to want to conquer Nature and kill everything that threatens us, but this intolerant "them or me" perspective has led to a lot of damage and kept us from taking a more benign path that would be better for us. Ecosystems produce a lot of life, beauty and value amidst all the killing :)

13 Aug 2017

Facebook is essentially misanthropic

I have had multiple bouts of doubt about Facebook, its business model, and its impact on users, but this essay brings new light to my fears of how it will monetize you.

In May 2010, I suggested two options:
  1. FB starts to charge a membership fee or goes fremium... [but Facebook promises "free and always will be," which brings us to...]
  2. FB struggles with free and ads. Maybe it shuts down, but then it goes rogue. All of that data you gave FB when you were 20, inexperienced, foolish and frequently photographed? FB is going to come back, when you are 30 or 40 and ask for a payment, to keep it private. That's because FB never really deletes your data when you tell them to "cancel your membership."
And now I see -- after reading that essay, that FB has essentially "gone rogue" with your personal data to not just target you with ads, but follow you everywhere you go on the internet (and with a mobile phone connection), to sell your profile to merchants who can then price discriminate against you -- and you may not even know they are getting private data on you.

That's why the essayist writes:
"Facebook, in fact, is the biggest surveillance-based enterprise in the history of mankind."
Bothered by this? You can quit Facebook (hard for people like when my work has failed to set up a communications system and uses Facebook instead), or minimize your vulnerability by, for example, keeping your mobile phone number to yourself (and not using FB mobile), as well as posting as little demographic information (age, address, hobbies, schools) as possible. (And switch as soon as possible to a less-invasive social network.)

Bottom line: There's a monopolist that is using your digital profile to take money from your pocket and redirect your life to suit the goals of advertisers. Caveat emptor.
Addendum (24 Feb 2018): Facebook failing: "As a society, we feel like we’re at war with a computer algorithm, and the only winning move is not to play," how a membership model results in content that helps you, and why Facebook won't ever change

11 Aug 2017

Friday party!

Go Dutch women! (European football champions)

(By coincidence, it's my mother's birthday today. She would have been 76 years old. RIP.)

10 Aug 2017

Competition leads to better political leadership

So end Gerrymandering (drawing electoral districts to favor one political group over another).

Want more? Here's John Oliver's excellent episode on why crazy voters should be able to pick their politicians, and not the other way around

9 Aug 2017

Links of interest

  1. My latest op/ed: "Adaptation should secure communities, not property"
  2. Peer-to-peer lending (I've had a terrible return from Lending Club) will only get legitimate when it's regulated like banking (there are too many incentives to provide sub-prime information now)
  3. Watch this Vox video on "the high cost of free parking"
  4. Corruption: "How powerful people use criminal-defamation laws to silence their critics"
  5. Recommended: "How to think like an economist"
  6. I'm quoted in "Opponents of California’s Delta Tunnels Project Push Alternative Strategies" (Here's my idea for local self reliance; this paper [pdf] estimates that SoCal could "support itself" without imports.)
  7. "A world of free movement would be $78 trillion richer"
  8. Globally, more people think China is a greater economic power than the US
  9. If electrical utilities like heatwaves, then surely water utilities like water waste
  10. A marketing guy applies economics to real life
  11. Should the Dutch switch to English and drop their mother tongue?
  12. "This paper shows that cheating [on a lab task in India] predicts corrupt behavior by civil servants, implying that it is a meaningful predictor of future corruption. Students who demonstrate pro-social preferences are less likely to prefer government jobs"

8 Aug 2017

Review: The Great Surge

I bought this 2015 book after hearing it praised as an excellent introduction to development economics. Its author, Steven Radelet, has several decades of experience as an academic, consultant and advisor to governments and agencies working to improve and implement programs to help people escape poverty, disease, ignorance and oppression.

The book is easy to read, with numerous examples and clear explanations of basic and advanced concepts, as well as an historical perspective that puts various development ideas into perspective. Although I am familiar with nearly all the ideas and examples in the book, I would be hard pressed to write so clearly and provide such a helpful framework to first time readers interested in these topics. The book thus provides a better introduction than either a textbook (too dense and/or inapplicable) or opinion piece (e.g., Easterly, Sachs, Moyo, et al.). That said, Radelet sometimes uses too many examples or repeats some points, so I suspect that the book could have been about 20 percent shorter and thus easier and clearer for the reader.

The book is organized into three parts: The Surge, the Catalysts, and The Future. The Surge explains how the end of the Cold War "freed" many countries from the need to align themselves to either the US or USSR as well as US or Soviet manipulation of those countries' politics in favor of their geopolitical goals. (Radelet explains how many bad colonial policies would have faced criticism in states that won their independence after WWII -- he lived and worked 5 years in Indonesia -- except for the influence of Cold War dynamics.) The upshot was that many regimes needed to adopt liberal political and economic policies as their leaders became more dependent on domestic legitimacy and lost the benefit of outside patronage. At the same time, there was also more opportunities for leaders who wanted to develop, as the end of a the First-World/Second World (US/USSR) dichotomy meant that neighbors could trade based on their comparative advantages rather than political orientation.

There are many exceptions to this generalization, but Radelet uses a dataset of 109 developing countries (neither too small nor too rich) to show how development surged for the average country in that dataset, i.e.,
My basic argument is that beginning in the 1980s and 1990s, many of the “unfreedoms” that had inhibited development began to be removed. The combination of huge geopolitical shifts, changing economic and political systems, deepening globalization, access to new technologies, stronger leadership, and courageous action created the conditions, opportunities, and drivers necessary for progress. The result was the great surge.
Radelet notes that this basic progress did not get a lot of attention from academics or the press, as the former are more interested in studying specific examples in detail and the latter are more interested in extremes and disasters. These points make sense to me. I've visited over 100 countries and the most consistent thing I've learned is that everyday normal dominates occasional exceptional. (I'm writing this in Japan where we've not encountered a single earthquake, sumo wrestler or tea ceremony!)

Radelet also makes a good point when he reminds us that "development" is not just something bought off the shelf. In a world of private goods (e.g., mobile phones), it is indeed easy to set up towers and charge subscriptions to people who have bought handsets from factories on the other side of the world. In a world of collective goods, one cannot ignore or avoid the need to cooperate with neighbors in the provision of public safety, taxation and spending on education and healthcare, etc. It takes time and effort (and often outside existential threats) to form the institutions that separate the "developed" from "developing," i.e.,
The history of more mature democracies shows that it takes many years to build the institutions, public attitudes, expectations, checks on power, and other systems required for democracy and accountability to become established. They must be monitored and strengthened. Democracy is a process: there are no shortcuts, and there are many setbacks along the way. Occasionally countries can evolve into strong democracies in a decade or two, especially when they have strong and gifted leaders, a unified society, and a favorable regional context. However, it often takes longer.

It took more than a century for democracy to solidify in Western Europe, and the process continues to unfold today. It took the United States 185 years to achieve universal suffrage, with numerous violent conflicts, a bloody civil war, disputed elections, massacres of American Indians, a divisive battle for basic civil rights, recurrent episodes of corruption, countless inside business deals, and human rights abuses along the way. The United States, for all its many strengths, today is far from an ideal democracy. The history of the world’s oldest and strongest democracies teaches us that the democratic transition is neither fast nor easy, and that it does not progress in an orderly fashion.
Although this quote gives me hope in a time of Trump and Brexit,* it also provides a warning of how hard it is to rebuild what some politicians so casually dismiss. Indeed, Radelet's prescriptions for the hopeful path (in the Future section) rely on a US leader who is democratic, willing to work with international institutions, focused on dealing with climate change and willing to work with China -- four characteristics that define the anti-Trump and indicate just what a disaster Trump is for the world.

Returning to the book, Radelet discusses four catalysts: technology, globalization, leadership and foreign aid. He does a good job at describing how each can help as well as fail, i.e., technology that helps some countries get ahead of others, globalization which brings cheaper goods but job losses, and leaders who can make or break a country. The discussion of leadership fits well with his earlier points on democracy and the institutions that keep bad leaders from doing damage and help good leaders move the country ahead. On international aid, Radelet is right to note that it is often helpful but not the only means to development. In most cases, development takes place as individuals work out ways to improve their lives and provide a better future for their children. This path (better examined by Scott in Seeing Like a State and Two Cheers for Anarchism) also explains how development has slipped under the radar of politicians, wonks and journalists who can only understand anecdote or oversimplified explanations.

The final section on the Future covers three paths: all goes well, middling along, and things turn bad. These last chapters are a bit tiresome for someone who would like a concise trajectory but Radelet is right to explain how various forces interact to help or hinder development. Although it's hard to be optimistic and easy to be pessimistic (easy if you worry about over population, populism and climate change), Radelet makes a good point in enumerating the many helpful steps on trade, cooperation, governance and technology that aided development after the horrors of World War II. Those decentralized advances took place in a time when a nuclear war could have killed billions and environmental damages rose to terrifying levels -- problems with modern equivalents in terrorists threatening nuclear war and climate change.

It's not hard to see human civilization as a series of two steps forward and one step back developments, so perhaps that is a good default to use, should we be thinking probabilities more than possibilities.

Bottom Line: I give this book FOUR STARS for its useful overview of the development that we have seen, the causes of that development and where we, as humans, might go in the future. I recommend it to anyone seeking to understand the basics and our common future.

* The Economist on populists:
If there is anything that unites the policies of Mr Trump with Brexit and the beliefs of European populists, it is a promise to break free of constraints. But a populist upswing propelled by unhappiness with established institutions raises an awkward question: if these institutions are worthwhile, why are people so frustrated by them? The authors argue that populists highlight the short-run advantages of wrecking institutions while downplaying the long-run consequences.

For all my reviews, go here.

Stossel vs an ecologist on rhinos

Here's some economic logic against faulty emotion:

(You may remember that I wrote in favor of markets for rhino horns -- and elephant tusks -- a few months ago.)

7 Aug 2017

Monday funnies

All too familiar (I was able to keep work to a minimum in our recent vacation :)

2 Aug 2017

Please support "Water: An Atlas" on Kickstarter

I have one page in this atlas, but it promises to be a really great book. Please consider supporting this project to help get better geo-spacial visualizations of water data in front of more people.

Here's a sample page:

1 Aug 2017

The Bitcoin fork

If you're interested in crypto-currencies, then maybe you've heard about this. If not, then maybe you want to watch this video to learn how a decentralized (=no government monopoly power) currency evolves.

This site is tracking the fork(s), which are set to occur in the next few days and months (depending on the definition).

Here, btw, is a very entertaining site that will explain Ethereum (another crypto currency) according to whether you're a scammer, nerd, artist, etc.