Politics – Page 188 – a sibilant intake of breath

Bastiat on subsidies

Anyone who spends time thinking about public policy might benefit from reading Frédéric Bastiat‘s final essay: “What Is Seen and What Is Not Seen,” published in 1850. Many of the sections – such as those concerning people employed by the armed forces, and those on state subsidies for the arts – are surely as valid now as 150 years ago.

Bastiat also provides a concise rebuttal of the kind of ‘job creation’ argument frequently employed by governments:

Let us get to the bottom of things. Money creates an illusion for us. To ask for co-operation, in the form of money, from all the citizens in a common enterprise is, in reality, to ask of them actual physical co-operation, for each one of them procures for himself by his labor the amount he is taxed. Now, if we were to gather together all the citizens and exact their services from them in order to have a piece of work performed that is useful to all, this would be understandable; their recompense would consist in the results of the work itself. But if, after being brought together, they were forced to build roads on which no one would travel, or palaces that no one would live in, all under the pretext of providing work for them, it would seem absurd, and they would certainly be justified in objecting: We will have none of that kind of work. We would rather work for ourselves.

That is, indeed, an excellent mental test of public worth. If we were all brought together to build a museum that will be widely admired and universally enjoyed, we will not feel cheated of our labour. If we were brought together to build some white elephant – an international airport for a tiny town, a bridge to nowhere, and anti-ballistic missile shield – we would feel duly resentful for not having employed our labour for better purposes.

The essay features a spirited defence of middlemen, which is well worth reading. The story told about rent seeking and protectionism is also admirably clear and engaging:

Mr. Protectionist was going to resign himself sadly just to being free like everyone else, when suddenly he had a brilliant idea.

He remembered that there is a great law factory in Paris. What is a law? he asked himself. It is a measure to which, when once promulgated, whether it is good or bad, everyone has to conform. For the execution of this law, a public police force is organized, and to make up the said public police force, men and money are taken from the nation.

If, then, I manage to get from that great Parisian factory a nice little law saying: “Belgian iron is prohibited,” I shall attain the following results: The government will replace the few servants that I wanted to send to the frontier with twenty thousand sons of my recalcitrant metalworkers, locksmiths, nailmakers, blacksmiths, artisans, mechanics, and plowmen. Then, to keep these twenty thousand customs officers in good spirits and health, there will be distributed to them twenty-five million francs taken from these same blacksmiths, nailmakers, artisans, and plowmen. Organized in this way, the protection will be better accomplished; it will cost me nothing; I shall not be exposed to the brutality of brokers; I shall sell the iron at my price; and I shall enjoy the sweet pleasure of seeing our great people shamefully hoaxed.

It is a point especially well made as the American electoral season continues to encourage less and less sensible statements from leading candidates, when it comes to trade.

McCain is wrong to suggest gas tax cuts

Following up on ‘hurricane insurance for all,’ John McCain has a new bad idea: suspending gasoline taxes over the summer. There are lots of reasons for which this is a bad move. Gasoline taxes are a partial recognition of the ways in which the price at the pump doesn’t include all the costs associated with driving: from road construction to keeping troops in Saudi Arabia. Also, it is important for people to realize that, in the long run, they will be paying ever more for gasoline. This is the result of three major phenomena: decreasing output from oil fields as they reach maturity, increasing demand from fast-growing states, and the increasing trend towards internalizing externalities associated with fossil fuel use. Creating a temporary dip in prices will obscure the broader message, while encouraging harmful behaviour.

If anything, the US presidential candidates should be sending a strong signal that the era of inexpensive gasoline in the United States is over. People should be bearing that in mind not only when they decide what sort of car to buy, but when nationwide efficiency standards are being set and urban transportation infrastructure decisions are being made.

Choosing nuclear

The flowchart above illustrates one process through which we could collectively evaluate the desirability of nuclear power, given the potential risks and benefits associated with the technology. In my personal opinion, the answer to the first question is probably “yes,” though perhaps not to as large a degree as commonly believed. The second and third questions are much more up in the air, and necessarily involve uncertainty. We cannot know exactly what will be involved in building a massive new nuclear architecture before it is done; similarly, it cannot be known with certainty what would result from choosing conservation and renewables instead.

As for the third question, there are major questions about risk evaluation and risk tolerance. If the world keeps running nuclear plants, it is a statistical certainty that we will eventually have another serious nuclear accident. No nuclear state is without its contaminated sites, and none yet has a geological repository for wastes.

This post definitely isn’t mean to settle the question initially posed, but rather to clarify thinking on the issue and dismiss the automatic logical leap from “climate change is happening” to “build more fission plants.”

Drugs for mental enhancement

A recent informal survey, conducted by Nature, suggests that large numbers of scientists are ‘doping’ with drugs that enhance their wakefulness and concentration. While the old joke holds that “a mathematician is a device for converting coffee into theorems,” drugs of choice have expanded to include Modafinil (Provigil) and Methylphenidate (Ritalin).

One in five respondents said they had used drugs for non-medical reasons to stimulate their focus, concentration or memory…

For those who choose to use, methylphenidate was the most popular: 62% of users reported taking it. 44% reported taking modafinil, and 15% said they had taken beta blockers such as propanolol, revealing an overlap between drugs. 80 respondents specified other drugs that they were taking. The most common of these was adderall, an amphetamine similar to methylphenidate.

I do not find this surprising. At a conference once, I met a young woman who pays her tuition by selling drugs usually prescribed for attention deficit disorder to fellow students at her Ivy League school.

It is not clear what kind of response is justified in the face of such anecdotal evidence. It is not obvious, prima facie, that the use of drugs is an inappropriate way to improve one’s mental function or academic output. People use all sorts of mechanisms – from physical activities to dietary modifications – to try to achieve the same end. Prescription drugs are thoroughly vetted for safety, though it is also fair to say that people self-prescribing are likely to make mistakes in terms of dosages and interactions with other substances. People make all kinds of sacrifices for success and it isn’t clear why it is obviously inappropriate for them to run the risks associated with altering their biochemistry. Given the degree to which success is related to self-esteem and contentedness, as well as the degree to which perceptions of failure associate with depression, it could arguably be better for one’s mental health to use whatever aids to success are available.

One legitimate concern is about a spiral effect. If honour roll students and leading researchers start becoming dependent on drugs to improve their focus, it might become difficult for anyone not doping to keep up. That could lead to situations in which people feel strongly pressured to do drugs as well. Of course, that strong pressure already exists in competitive academic environments. Still, there is reason to be especially wary when it is combined with psychoactive chemicals.

The questions suggested by the survey cannot be adequately addressed in a short blog post, but it does seem likely that they will be the subject of greater amounts of attention in the future. The competitive nature of the world, and the need to achieve things ever more rapidly, ensures that a market will exist for products that help people cope with both of those things. As with other unauthorized uses of drugs, the policies adopted by governments will affect things like price, availability, safety, and access to information and advice. Getting the balance right will be tricky.

Surveying the US and UK

This survey, comparing American and British attitudes on various subjects, contains some interesting bits of information. For instance, 2% of British people would be “angry” if their leader was an atheist, while 21% of Americans say they would be. Both sets of respondents are similarly negative when asked about a Muslim leader: 35% of Americans would be angry, compared to 34% of British people. Only 16% of Britains who believe in god also believe in hell, compared with 54% of Americans.

55% of Brits believe in anthropogenic climate change, compared to 49% of Americans, but neither country has citizens too keen on doing much about it. 79% of Yanks and 76% of Brits oppose higher gas taxes; half those polled in the UK oppose increased airline fares, compared with 67% of Americans. Opinions about nuclear are very similar in both states, with about 45% of people in favour of more stations and 30% opposed.

Asked to choose a new leader, the British respondents chose the following listing based on set options: Margaret Thatcher, Bill Clinton, Tony Blair, Ronald Reagan. Americans preferred Reagan and Clinton, with Thatcher and Blair as a near-tie. Americans are much keener on character than experience (ranked higher by 63% compared to 28%), while British respondents preferred experience by 50% to 39%. Americans are much more likely to distrust university professors (17% of respondents compared to 2% in the UK), while Brits are much keener on free trade (52% generally in favour, compared to 31% of Americans).

Both sets of respondents also seem to have a similar overall view of the future, with about 40% expecting the next generation to be worse off than they are, 27% expecting them to be better off, and 18% expecting things to remain about the same.

Some carbon capture similes

The media is full of talk about carbon capture and storage (CCS). At the same time, there are only four facilities in the world where it is done. None of them resemble a conventional coal-fired power plant.

As a result, our cost projections for the technology are far more speculative than is commonly acknowledged. It is like we are in the era of the Wright Brothers, and we are trying to sort out the economics of running a major airline.

As I have said before, we had better hope that CCS works, if only because so many different climate change mitigation plans depend on it. At the same time, we really need to acknowledge that there is some chance that it simply will not work, and we will need to find those megatonnes of reduction somewhere else.

That uncertainty also pertains to questions about building more coal power plants. Building them today – with the hope that CCS will eventually become available – is highly irresponsible. It might be compared to jumping out of a plane and hoping you can sew yourself a parachute before you hit the ground.

Thoroughly impressed by TED

Initially drawn in by the Al Gore video, I have been watching lots of the films from the TED conference, and being impressed by many of them. I am more impressed than ever by cephalopods, and some of my idle curiosity about how ants decide what to do has been satisfied. I also learned about some new reasons for which we should be wary about the long-term use of antidepressant drugs.

Putting these short lectures online is an excellent way of demonstrating the power of the internet to distribute ideas. Even for those of us who would balk at flying to California to attend some very neat talks, fiber optic links provide a low-carbon alternative.

Al Gore at TED

The Technology Entertainment Design Conference takes place annually in Monterey, California. At the most recent one, Al Gore presented an updated version of his climate change slideshow, made famous by his film An Inconvenient Truth.

It seems a bit remarkable for me that when I first saw that film in Oxford, I wasn’t yet convinced about the full extent of the threat of climate change. Since then, I have devoted the majority of my time and attention to this issue. If you have not done so yet, I encourage you to watch the video linked above, and perhaps read some of the posts in my climate change index.

It is not unrealistic to say that climate change will be the defining issue of the next century, and possibly far beyond. Gaining a strong understanding of it is the least we can do as educated people today.

Mintz on carbon taxes

Jack Mintz, who is apparently one of Canada’s leading economists, came out in support of a carbon tax today. Specifically, he suggested that federal taxes on gasoline be expanded to include the taxation of other carbon-generating fuels. This sort of upstream tax on fuels can complement a cap-and-trade regulatory scheme for large emitters by covering sectors of the economy too small to be efficiently addressed through the latter approach. Mintz does not have a reputation as a green champion, making his endorsement all the more suggestive of a general trend towards accepting carbon taxes as one good approach for addressing the massive problem of climate change.

Whereas the carbon tax recently created in British Columbia begins with prices of $10 a tonne, eventually rising to $30, Mintz proposes a federal tax of about $42 a tonne. One of the major issues raised concerns inter-provincial transfers from high emission provinces like Alberta and Ontario to lower emitting provinces like Quebec. That being said, there are many ways in which carbon taxes can be designed. They can be set up so as to not increase the overall tax burden, on account of taxes being reduced elsewhere. They can also be designed so that revenues collected in one province must also be recycled or invested there.

With luck, people will start to realize the opportunities inherent in replacing conventional taxes with carbon taxes. Doing so will offer a strong financial incentive to invest in greater efficiency, cleaner fuels, and more sustainable practices generally.

Hurricanes and climate change action

At several points in the past, I have mentioned the possibility that the majority of people will not be willing to accept serious action on climate change until at least one big, unambiguously climate related disaster has taken place. The same point is made in Joseph Romm’s book but, whereas I have speculated that it could be vanishing icecaps or large-scale climate induced human migration in Asia, he seems to think that Atlantic hurricanes striking the United States may make the difference.

There is good reason to find this plausible. The strength and frequency of hurricanes both have a lot to do with sea surface temperature (SST). While it isn’t feasible to attribute the occurrence or harmfulness of a particular storm to climate change, it is relatively easy to show a correlation between rising global temperature, rising SST, and more severe hurricanes. Simulations conducted by the U.S. National Oceanic and Atmospheric Administration Geophysical Fluid Dynamics Laboratory led to them concluding that “the strongest hurricanes in the present climate may be upstaged by even more intense hurricanes over the next century as the earth’s climate is warmed by increasing levels of greenhouse gases in the atmosphere.” Within decades, rising SSTs could make the kind of extraordinary hurricane seasons that have proliferated since 2000 the low end of the new scale.

This matters partly because a hurricane-climate change connection would affect Americans directly and very visibly. Insurance prices would rise further, at the same time as more areas became uninsurable and serious questions arose about whether to rebuild at all in some places. The cost trade-offs between insurance, protective measures like higher levees, and storm risk would be thrown into sharp relief. The perceived damages associated with climate change would also shift from being associated with people outside of North America at some distant point in the future to being both physically and temporally immediate.

Obviously, it would be better if serious measures to combat climate change (eliminating non-CCS coal, pushing hard on energy efficiency, building dramatically more renewable capacity, etc) could come about simply as the result of a reasoned assessment of the IPCC’s scientific conclusions and projected associated costs. If, however, it is going to take disasters before people and politicians are ready to embrace real change, we should hope that they will come early, carry a relatively small cost in human lives, and not exacerbate the problem of climate change in and of themselves, as fires and ice loss do.