Sustainable Economics and Ecological Psychology

[Astronuc]

A former professor and associate of my wife has developed a new field of which I am familiar with some elements.

The field is Ecological Psychology, and he has written a book entitled, "Ecological Psychology: Creating a More Earth-friendly Human Nature." The book explores the ethics of maximization, and the author "deftly balances the contemporary drive for exponential economic growth against the insights of ancient spiritual tradition and concludes that 'the cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace.'"

http://ecopsychology.athabascau.ca/1097/howard.htm

It's an interesting perspective and area of study. It also contrasts with excessive or conspicuous consumption which is so prevalent in the world today.

 

[OmCheeto]

A former professor and associate of my wife has developed a new field of which I am familiar with some elements.

The field is Ecological Psychology, and he has written a book entitled, "Ecological Psychology: Creating a More Earth-friendly Human Nature." The book explores the ethics of maximization, and the author "deftly balances the contemporary drive for exponential economic growth against the insights of ancient spiritual tradition and concludes that 'the cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace.'"

http://ecopsychology.athabascau.ca/1097/howard.htm

It's an interesting perspective and area of study. It also contrasts with excessive or conspicuous consumption which is so prevalent in the world today.

For some reason I am always drawn to famous names:

http://ecopsychology.athabascau.ca/1097/howard.htm
THE TRAGEDY OF MAXIMIZATION
George S. Howard

It is as if the social sciences are determined to convince humans that the "winners" in life are those who die with the largest bank accounts, those who have consumed the most pleasurable experiences, and those who have left the largest number of offspring. Nothing could be farther from the images of human nature and the good life articulated by thinkers of antiquity, such as Jesus, Mohammed, Confucius, Aristotle, Lao Tzu, Buddha, and the like.

So for some reason I researched how many children each had. (With the exception of Jesus of course). The tally was I think zero to 3. Some of these guys are so old as to be mere legends. But I think the author mentioned them for another reason.

Hardin's tragedy of the commons suggests that life in an overpopulated world of self-interested maximizers will be horrific. Unfortunately, it becomes clearer by the year that the twenty-first century will have precisely this nightmarish character. World population increases by 95,000,000 souls (and appetites also) each year

According to my brain, that's a billion extra people every 10 or so years. Have no one but the Chinese been paying attention?

Sadly, as Kenneth Boulding (past president of the American Economic Association) once remarked, "only madmen and economists believe in perpetual exponential growth."

And that's just the first 3rd of the synopsis.

I may be back some day to finish off my analysis of the problem.

 

[mulp]

A former professor and associate of my wife has developed a new field ...
:
It's an interesting perspective and area of study. It also contrasts with excessive or conspicuous consumption which is so prevalent in the world today.

I wonder why you consider this a new field, as small is beautiful by E. F. Schumacher springs to mind; it was published first in 1973, but was actually a collection of his essays published in the 50s and 60s.

plopping in a quote from wikipedia on him:

“It is when we come to politics,” Schumacher insisted, “that we can no longer postpone or avoid the question regarding man's ultimate aim and purpose.” If one believes in God one will pursue politics “mindful of the eternal destiny of man and of the truths of the Gospel”. However, if one believes “that there are no higher obligations”, it becomes impossible to resist the appeal of Machiavellianism—“politics as the art of gaining and maintaining power so that you and your friends can order the world as they like it”(2). Once one accepted that man was created by God with a designated purpose, politics, economics and art had value only for the end of helping man reach a higher plane of existence, which should be his goal (2).

By the end of the fifties Schumacher had reached the conclusion that man was homo viat (a pilgrim on a journey). He believed that it was the failure to recognize this fact which led to society's ills (2).

I note that the article on him suggests that he broke with Adam Smith, suggests but doesn't say, but Schumacher in many respects followed the path that Smith followed, as reflected in his writings on moral living. As Stein quipped, Adam Smith didn't wear an Adam Smith tie. When Adam Smith said that people act in the market in their self interest, he didn't mean greed, because greed is an immoral attribute.

Schumacher called Freud one of three culprits; again from wikipedia describing his views, "Freud had made perception subjective through his teaching that perception was subject to the complex interplay of the ego and the id, literally rendering it self-centered."

Maybe I'm missing the point, and what is new is the slicing and dicing of the ecology, which is the interaction of the total environmental system, into pieces that are then discussed and debated in total isolation from the ecology?

Economics, for example, evolved away from the framework that Adam Smith operated in, and excluded first morality from economic theory, and then excluding the ecology, and these factors are now pesky external forces that need to be dealt with as exceptions to the perfection of economic theory.

Will the future be that shrinks will be telling people that they need to think a certain way in order to make the ecology conform to the shinks' Ecological Psychology?

 

[OmCheeto]

I wonder why you consider this a new field, as small is beautiful by E. F. Schumacher springs to mind; it was published first in 1973, but was actually a collection of his essays published in the 50s and 60s.

hmmm... Looks like the author read that book also:

http://ecopsychology.athabascau.ca/1097/howard.htm
THE TRAGEDY OF MAXIMIZATION
George S. Howard

Reexamining Ancient Wisdom
...
A theologian might note that many religions promote moderation and thus tend to encourage earth-friendly lifestyles. For example, in Small is Beautiful E. L. Schumacher shows the intrinsically self-defeating characteristics of Western, maximizing, approaches to economics. He then offers a chapter entitled "Buddist Economics" that rethinks our most basic economic assumptions and offers alternative foundations based upon a Buddhist belief system and notion of the "goods" in life. Material goods are to satisfy human needs (as opposed to "wants") and are never collected for the sake of becoming wealthy. The cultivation and expansion of needs is the antithesis of wisdom.
...

I had never heard of the following philosophy until I watched the movie Mindwalk:

the Sioux explicitly mandated that its leadership evaluate any action's impact upon the next seven generations of Sioux before initiating a policy change.

And there he quotes Schumacher again:

Nonmaterialist world views represent a storehouse of alternative belief systems that might serve as partial templates for creating a nonmaterialist, nonconsumption-oriented vision of human nature. Western culture is thereby destroying the visions and values that might serve to temper its excesses. It is almost as if the maximization principle is systematically maximizing its chances of becoming the only vision of human nature. In 1973, Schumacher warned that "spiritual values" represented our only defense against the hegemony of the maximizing, economic vision. As a society, we have no firm basis of belief in any meta-economic values, and when there is no such belief the economic calculus takes over.

I'd better stop or I'm going quote the whole essay.

I'm afraid I cannot find fault with anything Mr. Howard has written.

Perhaps I'll just steal his motto and add it to my signature.


Extremism, even in the service of a virtuous cause, is to be deplored by reasonable people.
--- G.S.H.

 

[OmCheeto]

A fellow EV enthusiast sent the following link to our club recently.
Articles like this one for some reason have a bigger effect on me than saying the oil is running out. Does anyone know where to get video's of the following?

http://www.bloomberg.com/apps/news?pid=20601109&sid=ayik3UhgXZXQ&refer=home
Prius Designer Says Toyota-Led Industry Must Lose Oil Addiction
Jan. 23 (Bloomberg) -- Bill Reinert, who helped design Toyota Motor Corp.'s Prius hybrid, hovers in a helicopter 1,000 feet over Fort McMurray, Alberta. On this clear November morning, he's craning for a look at one of the world's largest petroleum reserves where there's not an oil well in sight.

Instead, in a 2-mile-wide pit below, trucks head to refineries with loads of sand weighing more than Boeing 747s. Yellow flames shoot skyward as 900-degree-Fahrenheit (482- degree-Celsius) heat liquefies any embedded petroleum. Floating scarecrows and propane-powered cannons do their best to chase migrating birds from lethal wastewater ponds.

Eventually, nuclear reactors may surround the crater 270 miles (435 kilometers) northeast of Edmonton, Alberta, delivering the power required to wring oil from sand.

``This is what the end of the age of oil means,''

 

[Astronuc]

Another thought on sensible economics -

Finding Drucker's vision in all that stuff
http://marketplace.publicradio.org/display/web/2008/02/04/drucker/
Commentator Charles Handy reflects on the philosophies of economist Peter Drucker to figure out what to do when a consumer economy starts to buy less stuff. First in an occasional series of commentaries by Charles Handy.

KAI RYSSDAL: Beginning today, Marketplace introduces a new commentary series with Charles Handy. Handy founded the London Business School. That was the first business school in the U.K. He's been a leader in the study of business management for decades. Charles Handy will spend the next few months at Claremont Graduate University's Drucker school. And during his visit, he'll be offering Marketplace listeners his impressions of America. Today is his first installment.

--------------------------------------------------------------------------------

CHARLES HANDY: Now that I am sitting where the great Peter Drucker walked and talked, I wonder how he would have reacted to some of the things that bother me. For instance, how would he respond to what I call "Adam Smith's Great Conundrum?"

Adam Smith, the father of economics, 250 years ago, said: "An investment is by all right-minded people to be commended, because it brings comforts and necessities to the citizenry. But, if continued indefinitely, it will lead to the endless pursuit of unnecessary things."

Now that I am living for a while in California, I am staggered by the amount of "unnecessary things" that I see in the malls that dot the suburbs. America is no different from anywhere else, of course -- just more so.

The conundrum is this: All that stuff creates jobs -- making it, promoting it, selling it. It's literally the stuff of growth. What I'd love to ask Peter Drucker is: How do you grow an economy without the jobs and taxes that these unnecessary things produce?

Drucker saw business as the agent of progress. Its main responsibility, he said, was to come up with new ideas and take them to market. But not just any new ideas, please -- only those that bring genuine benefits to the customers, and do not muck up the environment.

The market, unfortunately, does not differentiate between good and bad. If the people want junk, the market will provide. So we have to fall back on the conscience of our business leaders.

I agree that 1) business is supposed to serve society and in the process 2) do no harm.

 

[Economist]

1) business is supposed to serve society and in the process

You make it sound as though business is supposed to be considering society as a whole in their decision making process. I totally disagree, as they are supposed to have their customers in mind, and through serving their customers they serve society. There are many things that I probably care about and purchase that you don't and vice versa. To talk about a specific business trying to simultaneously serve everyone is nonsense.

2) do no harm.

This totally neglects the idea of trade-offs. Since this thread is related to environmental issues, it should be pointed out that the optimal level of pollution is not zero pollution. Do you realize that it's impossible to enjoy even a modest standard of living without some level of pollution? Do you really expect some of the poorest nations to not become industrialized at the expense of increasing their "carbon footprint?" Do you also realize that in order to escape poverty and have a higher standard of living (which includes non-material things like education, literacy, life expectancy, increased nutrition, more leisure time, etc) they would probably have to pollute more than they currently are?

 

[Astronuc]

You make it sound as though business is supposed to be considering society as a whole in their decision making process. I totally disagree, as they are supposed to have their customers in mind, and through serving their customers they serve society. There are many things that I probably care about and purchase that you don't and vice versa. To talk about a specific business trying to simultaneously serve everyone is nonsense.

Yes - a business, even an individual, must consider its/his/her impact on society. The customers/market are part of society.

I did not suggest that any business "try to serve everyone, and certainly not simultaneously".

This totally neglects the idea of trade-offs. Since this thread is related to environmental issues, it should be pointed out that the optimal level of pollution is not zero pollution. Do you realize that it's impossible to enjoy even a modest standard of living without some level of pollution? Do you really expect some of the poorest nations to not become industrialized at the expense of increasing their "carbon footprint?" Do you also realize that in order to escape poverty and have a higher standard of living (which includes non-material things like education, literacy, life expectancy, increased nutrition, more leisure time, etc) they would probably have to pollute more than they currently are?

Pollution should be minimized. The poorer nations do not need to be industrialized to the extent of the industrialized nations, and would do better if they didn't.

I disagree the poor nations would pollute more than they do now in order to escape poverty. Poor and developing nations have an opportunity to escape the nonsense and unnecessary stuff that burdens the industrialized world. All it takes is creativity and diligence.

 

[Economist]

Pollution should be minimized.

What do you mean "minimized?" Seriously, this is such a vague comment. Minimum pollution would be zero. If not zero, then what level? Also, at what cost?

The poorer nations do not need to be industrialized to the extent of the industrialized nations, and would do better if they didn't.

They might not "need" to be, but maybe they "want" to be. I'm sure you purchase and consume many things that you don't "need." So why do you purchase and consume these things? I would guess it's because you "want" them. You obviously have computer access and internet access (2 things you clearly don't "need"). You probably own a cell phone and a vehicle of some sort. People buy and do all sorts of things that are not neccessary, so what's your point?

 

[John Creighto]

I really think such ideas are more about politics then economics? How on Earth do you sensibly measure the economic cost of pollution? It is all politician's and often politicians are much worse at making decisions then the free market. The former soviet union was an environmental disaster.

Some people argue that the best way to protect the environment is to strengthen property rights. The idea being is if people own something they will take good care of it. I'm not sure if the idea of protecting the environment trough property rights is a good idea but at least then the value of the property will be based upon the value which people assign to it.

If people who own the property value the ecological aspects of the property then they will protect it. I think one weakness of the property rights argument is that it is only punitive. You are penalized for damaging someones property value but you aren't rewarded for enhancing someones property value.

For instance assuming that we actually cause global warming which to me is a big assumption then you will enhance the property valve of Canadians but may damage the property value of islands which are barely above sea level. Overall warmer temperatures present a more hospitable environment for humans but the people who emit CO2 could still face lawsuits from people who chose to by property too close to sea level.

I think that environmental commodities which are inherently conman preset difficulty in measuring environmental harm. We all don´t measure air quality in the same way and some people are considerably more sensitive to air quality then others. We all value clean air but for some reason most of us choose to live in cities? Could that be because we may not value clean air as much as we think?

 

[OmCheeto]

What do you mean "minimized?" Seriously, this is such a vague comment.

I don't find this any more vague than saying you want to minimize your financial losses.

Minimum pollution would be zero.

Bicyclist's emit CO2. I suppose we could shoot them all because they emit a global warming gas.

If not zero, then what level? Also, at what cost?

Minimized.

 

[OmCheeto]

I disagree the poor nations would pollute more than they do now in order to escape poverty. Poor and developing nations have an opportunity to escape the nonsense and unnecessary stuff that burdens the industrialized world. All it takes is creativity and diligence.

And it falls upon us to provide the path. As the world is looking to escalate to our standard of living, we see the numbers, and are looking to live more like them. The world has looked with fascination at America for some time now. If we could all just buy a Mercedes Smart Car next week, it might get some third world country citizens from thinking that owning a Mercedes 500 SLfmp* is "cool".




*SLfmp = Suck the life from my planet

 

[Economist]

I thought this was kinda funny (and interesting).

http://cafehayek.typepad.com/hayek/2008/02/nasty-dogs.html

Nasty dogs?
by Russell Roberts

Arnold at EconLog has a very nice post on the environmental impact of dogs:

"Which do you think takes a bigger toll on the environment, owning a dog, or owning an SUV? My bet would be on the dog. I'm thinking of all of the resources that go into dog food.

You could argue that children also consume a lot of resources, but that is different. A dog does not have the potential to discover a cure for cancer. A dog is not going to provide for you in your old age.

I personally have nothing against dogs. But it does seem to me that environmentalism inevitably points toward a policy of extermination of pet dogs. Unless environmentalism is simply hatred of industry."

What's particularly interesting are the comments. People are angry. Dogs are great, they say. They make people's lives better.

No doubt. So do SUVs. So do grapes from Chile. I think Arnold was merely suggesting that there are tradeoffs. If you make tradeoffs for dogs (which of course you should), why not make them for SUVs?

 

[CaptainQuasar]

The field is Ecological Psychology, and he has written a book entitled, "Ecological Psychology: Creating a More Earth-friendly Human Nature." The book explores the ethics of maximization, and the author "deftly balances the contemporary drive for exponential economic growth against the insights of ancient spiritual tradition and concludes that 'the cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace.'"

Sounds a little bit like the objectives that behavioral conditioning was applied to in http://en.wikipedia.org/wiki/Walden_Two" .

You make it sound as though business is supposed to be considering society as a whole in their decision making process.

Yes, businesses are expected to consider the public good. That's why they're supposed to take things like the law into account in their decision making process. Many people don't have the kind of integrity it takes to do this on their own - they would readily terrorize and kill people to achieve their objectives, despoil the environment, defraud or manipulate the government, or employ orphans in sweatshops if left to their own devices - so they have to be forced to consider society as a whole.

⚛​

 

[Economist]

Yes, businesses are expected to consider the public good. That's why they're supposed to take things like the law into account in their decision making process. Many people don't have the kind of integrity it takes to do this on their own - they would readily terrorize and kill people to achieve their objectives, despoil the environment, defraud or manipulate the government, or employ orphans in sweatshops if left to their own devices - so they have to be forced to consider society as a whole.

⚛​

In my honest opinion we don't have to worry too much about businesses killing people. Generally, this is bad for business (such as if your product actually kills people) and leads to bankruptcy. Even if they wanted to kill people, I doubt people would just stand by and let them (in other words, people would probably defend themselves with whatever means necessary). Do these same laws you speak of always stop criminals from robbing, raping, killing, etc? It seems to me that citizens should be much more worried about governments harming them (in comparison to businesses). I challenge you to name a business that has killed or harmed people in any way even close to tyranical governments.

Don't get me wrong, as I'm not saying laws are unimportant. Laws are very important. However, I doubt that businesses would be running around killing and plundering without these laws. At the very least, they would definitely not be any more likely to do these things in comparison to anyone else (including citizens). What generally keeps businesses honest is not the law, but rather their own self-interested goals. Ever heard of Adam Smith's "Invisible Hand?" Ever heard of this famous quote from Smith: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their self-love, and never talk to them of our own necessities but of their advantages."

Lastly, you're also forgetting the fact that legislation can sometimes (often?) be very flawed. In other words, it rarely serves the public good, and often serves the special interest of a selected few (which is one reason so many businesses love the law, because they can use if for their personal gain at the expense of others). Would you defend the legislation that makes many drugs (including marijuana) illegal? Would you defend prohibition? Would you defend legislation that makes it illegal for people to drive taxis without the proper licenses? Would you defend legislation that makes it illegal for people to open up barber shops without the proper licenses? Would you defend legislation that makes it illegal for me to get a job at $3 an hour? Would you defend legislation that makes it illegal for me to trade with whom ever I want (regardless of what continent they live on)? What gives you the right to impose laws on me when I am not threating your safety or your rights?

Again, businesses are not exactly supposed to serve the "public good." Rather they are supposed to serve their consumers, which is the way in which they serve the public.

 

[AsianSensationK]

Lastly, you're also forgetting the fact that legislation can sometimes (often?) be very flawed.

I'd be careful here. Law and legislation are not quite the same thing. One is very, very broad and the other is very narrow. Theories like torts and contracts are far more fundamental to law than all this new legislation that gets passed. These theories are part of the common law determined by judges throughout history, not by legislative bodies. Because of that these theories have the benefit of history backing them up all while the concepts get re-shaped and re-defined by new situations.

In my honest opinion we don't have to worry too much about businesses killing people. Generally, this is bad for business (such as if your product actually kills people) and leads to bankruptcy. Even if they wanted to kill people, I doubt people would just stand by and let them (in other words, people would probably defend themselves with whatever means necessary). Do these same laws you speak of always stop criminals from robbing, raping, killing, etc? It seems to me that citizens should be much more worried about governments harming them (in comparison to businesses). I challenge you to name a business that has killed or harmed people in any way even close to tyranical governments.

Would businesses kill? Probably not these days. That's an exaggeration.

Could businesses not honor the terms of their contract or try to enforce un-enforceable contracts? It's happened before. Would they engage in horribly negligent actions? Again, it's happened before and it's one of the reasons the law developed in the first place.

 

[CaptainQuasar]

In my honest opinion we don't have to worry too much about businesses killing people.

If you really believe that you are demonstrating ignorance of the history of corporate crime, even recent corporate crime. Businesses kill people all the time. Remember the lead-poisoned toys from China? The equivalent of the Chinese head of the FDA was http://news.bbc.co.uk/2/hi/asia-pacific/6286698.stm" last year for taking bribes to allow things like that to happen after many fatalities.

I challenge you to name a business that has killed or harmed people in any way even close to tyranical governments.

The http://en.wikipedia.org/wiki/Bhopal_disaster" . The wars in the Congo and Central African Republic which mining companies are all too ready to permit and promote while they send armed parties into bribe warlords and extract resources.

But of course, I didn't say anything about comparison with governments, I just said that businesses have a duty to promote the public good and avoid harming the public and the public good and they often have to be forced to fulfill that duty. Governments and government officials being irresponsible or acting criminally does not relieve corporations of their own duty to the public good. This is a red herring.

However, I doubt that businesses would be running around killing and plundering without these laws.

I don't usually like to sound patronizing but I seriously have to ask, do you know any history at all? That's just about all big business does when it has free rein. Much of the social and political progress that has occurred in the last two centuries has involved restricting wealthy people and wealthy businesses from harming and killing people at their convenience and plundering the public good.

At the very least, they would definitely not be any more likely to do these things in comparison to anyone else (including citizens).

Citizens also have a duty to promote the public good and avoid harming the public and the public good. The difference is that while citizens (unless they were rich) have always gotten nabbed for breaking the law, through most of history businesses have usually managed to get away with it.

Lastly, you're also forgetting the fact that legislation can sometimes (often?) be very flawed.

No, I'm not forgetting it, I didn't say anything at all about legislation being perfect.

Again, businesses are not exactly supposed to serve the "public good." Rather they are supposed to serve their consumers, which is the way in which they serve the public.

Yes, businesses are supposed to serve the public good. That's the entire justification for the existence of laws forcing them to do so.

Businesses certainly often wish they didn't have to worry about things like safety and pollution and good husbandry of commonly-owned things like ocean fish stocks, mineral resources, or the radio spectrum, or comply with measures for the public good like zoning regulations. But tough luck for them, they'll just have to run home and throw themselves on their bed and cry big salty tears onto the pillows stuffed with cash.

⚛​

 

[Economist]

I'd be careful here. Law and legislation are not quite the same thing. One is very, very broad and the other is very narrow. Theories like torts and contracts are far more fundamental to law than all this new legislation that gets passed. These theories are part of the common law determined by judges throughout history, not by legislative bodies. Because of that these theories have the benefit of history backing them up all while the concepts get re-shaped and re-defined by new situations.

Yes, law and legislation are different things. According to FA Hayek, law is something that human beings do and design on their own, while legislation is something that is often decided in courts and most people are unaware of.

Would businesses kill? Probably not these days. That's an exaggeration.

Could businesses not honor the terms of their contract or try to enforce un-enforceable contracts? It's happened before. Would they engage in horribly negligent actions? Again, it's happened before and it's one of the reasons the law developed in the first place.

My point was that often times businesses honor contracts more for future business (read: profits) instead of legislation. Again, I am not saying that legislation is unimportant, just that it's not the only thing to consider, and that other aspects probably play even a more prominent role in describing organizational behavior.

If you really believe that you are demonstrating ignorance of the history of corporate crime, even recent corporate crime. Businesses kill people all the time. Remember the lead-poisoned toys from China? The equivalent of the Chinese head of the FDA was http://news.bbc.co.uk/2/hi/asia-pacific/6286698.stm" last year for taking bribes to allow things like that to happen after many fatalities.

Ok, fair enough, maybe I just don't know about the numerous cases in which this happens. I hope you will inform me by listing many of the cases. In order to have some sense of proportion though, we'll need to compare the numbers you get, with the total number of business activity that takes place. I'm sure the results will be that businesses harming people is a very small percentage of the total activity.

Yes, I remember the Chinese lead toy situation. I also remember it seemed to get handled pretty quickly. To my knowledge, no one was killed due to these toys. I always wondered how drastic the situation really was, and how much of the dramatization was media spin for a good story. I also wondered how the lead in those toys compared to the lead in some of the toys that I played with as a child.

Do you really think that someone will just get away with selling very harmful toys? Don't you think that if Toys-R-Us started selling toys that were killing people, they'd probably go bankrupt? Don't you also think that Toys-R-Us would probably not trust a producer who sold them harmful toys in the first place? My point is that these things are bad for business, which is precisely why they are rare, and precisely why they get nipped in the bud right away. Just for the record, I do think the legal system is important. If someone's child dies or gets sick because of these toys, they definitely have the right to sue Toys-R-Us.

I also remember when Jack-in-the-Box had an ecoli break out. Again though, they figured it out soon and took the necessary actions. Furthermore, I'm sure they lost a ton of business for awhile because people were afraid to eat there. I also bet they try really hard to not let it happen again.

The http://en.wikipedia.org/wiki/Bhopal_disaster" . The wars in the Congo and Central African Republic which mining companies are all too ready to permit and promote while they send armed parties into bribe warlords and extract resources.

I read the wikipedia article, and it truly is a tradegy. My point is that these things are the exception to the rule.

But of course, I didn't say anything about comparison with governments, I just said that businesses have a duty to promote the public good and avoid harming the public and the public good and they often have to be forced to fulfill that duty. Governments and government officials being irresponsible or acting criminally does not relieve corporations of their own duty to the public good. This is a red herring.

I mainly disagree with the statement "they often have to be force to fulfill that duty." The hole argument I am making is that companies help people (as opposed to harm them) precisely because they are greedy, and you can't stay in business very long by screwing over your customers. They don't do it because they care for us, they do it because they care for themselves. That's the reason capitalism works fairly well, because people are given strong incentives to do the right thing most of the time.

I don't usually like to sound patronizing but I seriously have to ask, do you know any history at all? That's just about all big business does when it has free rein. Much of the social and political progress that has occurred in the last two centuries has involved restricting wealthy people and wealthy businesses from harming and killing people at their convenience and plundering the public good.

I definitely am not the most versed in history, I will admit that.

I hope you will fill me in. Explain to me all these wealthy people who completely screwed people over? It seems to me, usually the wealthy people in history who screw people over are political leaders, which is a different story.

Like I said before, I'm not against legislation. As I see it, people have 3 basic rights (life, liberty, and property) and others cannot interfere with those rights. If a business is plundering one's property, or harming one's life, then they should pay the consequences (just like an individual would). This is totally different from minimum wage legislation, safety legislation, and a whole host of other legislation.

How do you figure that the progess is due to these legislations and regulations you are referring to?

Citizens also have a duty to promote the public good and avoid harming the public and the public good. The difference is that while citizens (unless they were rich) have always gotten nabbed for breaking the law, through most of history businesses have usually managed to get away with it.

Again, explain to me all these rich people who were allowed to infringe on peoples rights?

Yes, businesses are supposed to serve the public good. That's the entire justification for the existence of laws forcing them to do so.

I see it differently, but maybe I'm getting to caught up in semantics. I see businesses as serving very small sections of the public good. Essentially, they're liable to their customers and no one else (unless they're harming others). In the aggregate, there are many businesses, so all of them are serving somebody and therefore most people get served.

Often times laws are justified not so much for making sure businesses don't harm people, but rather to have power and control over businesses in order to be able to tell them what to do. Legislation is rarely used to promote the public good, instead it's mainly used to promote special interest. Businesses use legislation to harm other businesses. Businesses use legislation to harm customers. Customers use legislation to harm businesses. Workers use legislation to harm businesses. Workers use legilsation to harm customers. Politicians and other "public servants" use legislation to harm businesses, workers, and customers.

Businesses certainly often wish they didn't have to worry about things like safety and pollution and good husbandry of commonly-owned things like ocean fish stocks, mineral resources, or the radio spectrum, or comply with measures for the public good like zoning regulations. But tough luck for them, they'll just have to run home and throw themselves on their bed and cry big salty tears onto the pillows stuffed with cash.

You claim I am displaying ignorance about history. Well, I would say you're displaying ignorance about economics.

Yeah, they have to be restricted for commonly owned land because they will over use. This is a result of a lack of property rights. Ever heard of the tragedy of the commons? However, if someone actually owned some of these things, then many of the problems would be taken care of for the same reasons I've been mentioning throughout this post (they'd have an incentive to not over use).

Zoning regulations hurt citizens, especially the poor. Zoning regulations make it very expensive to build housing in many areas. Thomas Sowell discusses how these regulations are responsible for making homes in many California cities highly expensive to the point that low-income people must live far away from their work and commute numerous hours every day.

 

[Economist]

I read this today, and thought it was somewhat related to the discussion.

http://cafehayek.typepad.com/hayek/2008/02/a-tribute-to-ju.html

Simon's most important contribution was to crystallize and explain an insight that even the best economists before him only glimpsed -- namely, that human beings in free societies are "the ultimate resource." Nothing -- not oil, not land, not gold, not microchips, nothing -- is as valuable to the material well-being of people as is human creativity and effort.

Indeed, there are no resources without human creativity to figure out how to use them and human effort actually to do so. Recognizing the truth of this insight renders silly the familiar term "natural resources."

No resources are "natural."

Take petroleum. What makes it a "resource"? It's certainly not a resource naturally. If it were, American Indians would long ago have put it to good use. But they didn't. I suspect that for Pennsylvania's native population in, say, the year 1300, the dark, thick, smelly stuff that bubbled up in watering holes was regarded as a nuisance.

Petroleum didn't become a resource until human beings creatively figured out how to use it to satisfy some human desires and other human beings figured out how to extract it cost-effectively from the ground.

Or take land. For at least 80 percent of Homo sapiens' time on earth, land was merely something to trod and hunt upon. Land had no special value as a resource until about 10,000 years ago when someone figured out how to cultivate soil and to plant, tend and harvest crops. Only then did land achieve the kind of status and value that we associate with a resource.

The same, of course, is true for magnesium, iron ore, bauxite, feldspar, trees, New York harbor -- you name the "natural resource" and you'll realize that it is a resource only because human beings creatively determined how to use it productively.

An important implication of this realization that humans are "the ultimate resource" is that high and growing population -- in societies with sufficient freedom to allow individuals to experiment and create -- is desirable. If human creativity and effort are not only resources, but also the ultimate resource, surely it's foolish to lament large and growing supplies of it.

 

[CaptainQuasar]

Ok, fair enough, maybe I just don't know about the numerous cases in which this happens. I hope you will inform me by listing many of the cases. In order to have some sense of proportion though, we'll need to compare the numbers you get, with the total number of business activity that takes place.

I'll leave establishing a sense of proportion up to you if that's something you want to do. You asserted that businesses don't kill or plunder and I demonstrated that to be manifestly false.

I mainly disagree with the statement "they often have to be force to fulfill that duty." The hole argument I am making is that companies help people (as opposed to harm them) precisely because they are greedy, and you can't stay in business very long by screwing over your customers.

No, actually. You were arguing that companies are not “supposed to be considering society as a whole in their decision making process”.

Fine, maybe there's some sort of magic econo-force powered by the profit fairies that makes sure that commercial and industrial activity always helps people instead of harming them. It doesn't matter.

Whether it's in their nature or not it is the duty of companies to promote the public good. They do not have license to simply let rip with their commercial activities because there's some invisible hand protecting everyone, they must in every decision take this duty into account.

Explain to me all these wealthy people who completely screwed people over? It seems to me, usually the wealthy people in history who screw people over are political leaders, which is a different story.

If you get into history a little bit you'll realize that for most of human history only the wealthiest people in society have been political leaders of any sort. Wealthy individuals and groups have always dominated less wealthy groups and individuals and before the last couple hundred years the only way that state of affairs has changed is through violence.

Again I'm going to leave it up to you to read up on history if you need some examples of wealthy people or businesses completely screwing people over.

⚛​

 

[Economist]

No, actually. You were arguing that companies are not “supposed to be considering society as a whole in their decision making process”.

Companies aren't supposed to be considering society as a whole. They are supposed to try and serve their customers while not enchroaching on other's rights.

Would you consider the laws that ban smoking in restaurants to be an example of protecting the public good? What about laws that say transfat should be illegal?

If you get into history a little bit you'll realize that for most of human history only the wealthiest people in society have been political leaders of any sort.

I believe this proves my point. If being rich and wealthy was in and of itself a good way to control people, then these rich people wouldn't have went into politics. They needed the power and control of government in order to really harm others. Yes, I agree that rich people may have had an advantage in getting into politics, but that doesn't mean that money is power (because in reality, it's politics that is power).

 

[Economist]

A former professor and associate of my wife has developed a new field of which I am familiar with some elements.

http://ecopsychology.athabascau.ca/1097/howard.htm

I am reading the article/link.

Hardin speaks of a shared public resource (public grazing land) that becomes decimated by overgrazing because each individual rancher might try to maximize his/her profit by grazing as many cattle on the commons as he or she could afford. Unfortunately, the public resource is soon destroyed through overuse, and all ranchers suffer tremendously. Hardin argued convincingly that a tragic consequence is virtually inevitable when sharing resources as long as each person is intent on maximizing his or her own profits. The fading years of the twentieth century document the prescience and persuasiveness of Hardin's analysis (e.g., the decimation of certain Atlantic and Pacific fish stocks, the burning of the rainforests, the decline of our National Parks, etc.) when individual self-interest comes into conflict with the common good. However, if the myopic pursuit of self-interest leads to tragedies, as Hardin suggests, why would rational humans continue to try to maximize their self-interest?

It seems to me that he is missing some key elements of his discription of the tragedy of the commons.

First, he makes it sound as though "the tragedy of the commons" occurs mainly because people try to maximize their self-interest. Yet he fails to mention one of the most important take home messages of "the tragedy of the commons," which is that weak property rights or absence of property rights leads to overuse (and not maximizing self-interest). For example, we all maximize our self-interest with respect to many resources, yet we are not over-using them because our use of these resources is limited because we have to pay for them. We have to pay for them because the owner (i.e. the person who has property rights) requires us to pay for the resource.

Second, is there anything you can do to curb peoples intention's to maximize their self-interest? No law will stop people from striving to maximize their self-interest.

Third, he states that over-using resources and attempting to maximize self-interest is irrational. Nothing could be further from the truth, in fact, the only reason that "the tragedy of the commons" even occurs is precisely because people are rational (in other words, they attempt to maximize their self-interest).

Richard Herrnstein states this fact bluntly, "Not just economics, but all the disciplines dealing with behavior, from political philosophy to behavioral biology, rely increasingly on the idea that humans and other organisms tend to maximize utility, as formalized in modern economic theory . . . The scattered dissenters to the theory are often viewed as just that - scattered and mere dissenters to an orthodoxy almost as entrenched as a religious dogma."

Maybe the theory of utility maximization is so wide spread precisely because it matchs up with the data/facts. In other words, utility maximization is a useful theory because the hypotheses that are derived tend to be supported. Economists don't care what people "should do," they care what people "actually do." This is what makes economics a positive science as opposed to a normative discipline.

Barry Shwartz, in The Battle for Human Nature, demonstrates how the notion of utility maximization in economics is transformed into reinforcement maximization in behavioral psychology, into maximizing the number of one's genes that make it into the next generation's gene pool in sociobiology, and so on. It is as if the social sciences are determined to convince humans that the "winners" in life are those who die with the largest bank accounts, those who have consumed the most pleasurable experiences, and those who have left the largest number of offspring. Nothing could be farther from the images of human nature and the good life articulated by thinkers of antiquity, such as Jesus, Mohammed, Confucius, Aristotle, Lao Tzu, Buddha, and the like.

This is false. Even within utility maximization you don't get the results they are referring to. Economists hardly assume that people want the largest bank account or want to have sex with as many people as possible. In fact, most economists are academics that make approximately $75,000 a year, even though they could be working for corporations making $150,000 a year. Does this disprove utility maximization? Not according to economists, who claim that people care for many things (not just money). Economists realize that the benefits derived from a job are not just financial. In other words, it's within utility maximization (i.e. it's rational) to pass up high paying jobs, pass up sex, care about others more than yourself, etc.

 

[CaptainQuasar]

Companies aren't supposed to be considering society as a whole. They are supposed to try and serve their customers while not enchroaching on other's rights.

“Not encroaching on other's rights” is considering society as a whole.

Would you consider the laws that ban smoking in restaurants to be an example of protecting the public good? What about laws that say transfat should be illegal?

Let's hear whether you think those laws are trying to protect the public good first, since you're the one asking.

I believe this proves my point. If being rich and wealthy was in and of itself a good way to control people, then these rich people wouldn't have went into politics. They needed the power and control of government in order to really harm others. Yes, I agree that rich people may have had an advantage in getting into politics, but that doesn't mean that money is power (because in reality, it's politics that is power).

For most of the history before the last two hundred years you didn't “get into politics” in most places, you either had to be born into it or you had to take such a position by force after raising your own armies.

Really, man, you need to get into some History 101 stuff here. Most of the past has been very different from the present. The kind of world you're used to and the things you're taking for granted are the product of many generations of dramatic change of society, not standard features of the human condition. Like the concept that people in general even have rights - that's a relatively new invention.

⚛​

 

[Economist]

“Not encroaching on other's rights” is considering society as a whole.

I agree. I thought you were talking about going above and beyond just not encroaching on peoples rights.

Let's hear whether you think those laws are trying to protect the public good first, since you're the one asking.

I think it's bs that companies can't allow people to smoke there. They own the property rights to the building and if they want to allow their customers to smoke, nobody should be allowed to tell them what to do. No one is being forced to go to that company or restaurant. If you don't like smoke, then don't go to that restaurant or store. It makes about as much sense as telling an individual whether or not they can allow smokers in their home.

I feel the same way about the transfat. No one is being force fed fatty foods. If someone doesn't like it, then don't eat at the restaurant.

I see both of these as clear illustrations of enchroaching on one's liberty and freedom.

For most of the history before the last two hundred years you didn't “get into politics” in most places, you either had to be born into it or you had to take such a position by force after raising your own armies.

Really, man, you need to get into some History 101 stuff here. Most of the past has been very different from the present. The kind of world you're used to and the things you're taking for granted are the product of many generations of dramatic change of society, not standard features of the human condition. Like the concept that people in general even have rights - that's a relatively new invention.

Obviously people didn't tend to get into politics back then. People got into politics because of being born into the right family. However, these people used politics for their own personal gain to get rich. It's still using the power and control of government at the disadvantage of others.

I also realize the concept of rights is new. The point is that we were talking about capitalism (which is also fairly new) and I was stating that within capitalism businesses generally don't get rich by pludering and killing their customers. In other words, their self-interest keeps them in check much more than legislation does. As Walter Williams once said, "For most of human history you got rich by pludering your fellow man. It wasn't until capitalism that you got rich from helping your fellow man."

 

[Economist]

continuing with the article:

The lie, that human nature demands that individuals maximize their self-interest, is particularly problematic for biological ecosystems. Economies, governments, businesses, and the like might work well with a fundamental assumption of the maximization of self-interest. However, Hardin's tragedy of the commons suggests that life in an overpopulated world of self-interested maximizers will be horrific. Unfortunately, it becomes clearer by the year that the twenty-first century will have precisely this nightmarish character. World population increases by 95,000,000 souls (and appetites also) each year - with no lessening of this yearly increase in the offing. And what is the fundamental world view of the world's almost six billion humans?

I don't know of any economist who states "human nature demands that individuals maximize their self-interest" because to do so would be a value judgement. All the economists I know state that it seems that individuals do maximize their self-interest. It's not a matter of what humans ought to do, it's a matter of what humans do.

I think it's also seems that he is implying that we won't be able to care for more and more people. Interstingly enough, the world is enjoying the highest standard of living in human history while at the same time having the highest population in human history. How does he explain that?

While this strategy might make impeccable sense for individuals, businesses, economies and governments - in the short run - it is doomed to failure in the long run because it is based upon ever-increasing material throughput (i.e., business activities that consume resources and produce wastes).

I do not share his long-run worries. Read the article I posted above which states that human beings are the ultimate resource. Human beings adjust to these things, by innovating new resources and by decreasing are dependent on depleting resources. Also, if there are not enough resources to go around, there would probably be a decrease in the population and therefore a decrease in the number of resources required.

While we can and should find ways to use these resources more efficiently, we live in a world of important physical and biological limits. Yet we've adopted world views that rest upon dreams of geometric growth.

We do find ways to use resources more efficiently. If we can't continue to have economic growth, then who cares about our world view if it's incorrect because reality will curb our demands. I doubt we'll have the problems he suggests, because once again humans are the ultimate resource. Just because he can't conceive of the ingenious ways we will advance and innovate in the future doesn' mean it will not happen.

What are the world views that do not seek to maximize material throughput, and thus hold the possibility of fostering sustainable lifestyles in the twenty-first century? A theologian might note that many religions promote moderation and thus tend to encourage earth-friendly lifestyles. For example, in Small is Beautiful E. L. Schumacher shows the intrinsically self-defeating characteristics of Western, maximizing, approaches to economics. He then offers a chapter entitled "Buddist Economics" that rethinks our most basic economic assumptions and offers alternative foundations based upon a Buddhist belief system and notion of the "goods" in life. Material goods are to satisfy human needs (as opposed to "wants") and are never collected for the sake of becoming wealthy. The cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace. Every increase of needs tends to increase one's dependence on outside forces over which one cannot have control, and therefore increases existential fear. Only by a reduction of needs can one promote a genuine reduction in those tensions which are the ultimate causes of strife and war.

I don't know anyone who tries to maximize material wealth indifinitely. In other words, human beings care about more than just material wealth which is precisely why it can still be utility maximizing (i.e. wealth maximizing) to have a family, friends, religion, or turn down a job for more liesure time, retire, volunteer, etc.

I also think he is mistaken to state that wanting things is the "anti-thesis" of freedom and liberty. He backs up his claim by stating that we rely on others for too many things. We do rely on people for many things, even outside of material well being. Someone taught me how to read, I relied on school for information and knowledge, I relied on my parents to feed me, the list goes on. The point is that human beings are interconnected very much, and capitalism did not create this. What capitalism did was allow people to specialize and therefore increase production which makes it cheaper to trade and barter to take care of your needs. This guy is a hypocrit, if it's so bad to rely on others than why doesn't he plant his own food, build his own care, build his own computer, grow his own trees to build his house and make his own paper, etc. The reason he can maintain such a high standard of living is precisely because he relies on others. I doubt he's ever taken an econ class or even read the Wealth of Nations, because these are the most fundamental concepts in economics.

An examination of the New Testament reveals that Jesus lived a life that eschewed maximization, lavish consumption, and materialism at every turn.

This is not neccessarily true. Maximization and consumption/materialism are not the same thing. When economists say people "maximize" we are not talking about consumption, but rather "utility." Utility is not derived only from consumption. For all we know, Jesus received a lot of utility from living life the way he did, which would make him a maximizer. Individuals have different preferences, some care more about material wealth, while other care more about family and friends, while others care more about religion, while others care more about philosophy and science. The point is, these are all maximizers. We'd expect the person who cares more about material wealth to work more and make more money, while the person who cares more about religion or science may take a huge paycut in order to do what they enjoy. If someone chooses to quit their high paying job as a doctor and instead go to a third world country and help the poor for free, economists would still consider that person a maximizer exhibiting maximizing behavior. In other words, given all the benefits (including psychic benefits) and all the costs, they chose to consume less, but they are still maximizing.


I have to go to class right now, but I will read the rest and enter my comments. The main thing that is apparent to me is that this author knows nothing about economics, even though he continues to talk about the subject. He might actually have some good things to add if he wasn't bashing a discipline he is completely ignorant in. To quote Murray Rothbard: "It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

 

[CaptainQuasar]

In other words, their self-interest keeps them in check much more than legislation does.

I think this is an unrealistic proposition in the light of history and ongoing corporate crime and to be perfectly honest a naïve one. I think that, given the choice between a path or activity that involves behaving responsibly and a path or activity that makes a higher profit but screws someone over in a manner where the company is unlikely to get caught, only companies who are minding their duty to the public good independently of their self-interest will choose the responsible path.

As Walter Williams once said, "For most of human history you got rich by pludering your fellow man. It wasn't until capitalism that you got rich from helping your fellow man."

Good quote. I do agree with you that capitalism is beneficial in many ways, indeed providing benefits that we could never provide to society intentionally by planning everything out. I just regard it more as a beast that needs to be tamed and yoked to really do good rather than some general force for good. If you just let it loose you're always going to get gored and trampled.

⚛​

 

[Economist]

I think this is an unrealistic proposition in the light of history and ongoing corporate crime and to be perfectly honest a naïve one.

I wouldn't be suprised if many economic historians would likely call your perspective a naive one.

What do you mean "ongoing corporate crime?" Explain to me all this corporate crime currently taking place.

I think that, given the choice between a path or activity that involves behaving responsibly and a path or activity that makes a higher profit but screws someone over in a manner where the company is unlikely to get caught, only companies who are minding their duty to the public good independently of their self-interest will choose the responsible path.

Ok, explain to me scenarios in which companies had a chance to make higher profits precisely by screwing so many people over.

Please, watch volume 7 titled: Who protects the consumer? You can choose the video you want to watch on the right side of the screen. Then please fill me into all the numerous ways that Milton is incorrect.

http://ideachannel.tv/

Good quote. I do agree with you that capitalism is beneficial in many ways, indeed providing benefits that we could never provide to society intentionally by planning everything out. I just regard it more as a beast that needs to be tamed and yoked to really do good rather than some general force for good. If you just let it loose you're always going to get gored and trampled.

I always hear people using this beast metaphor for capitalism. I think often times people just want to be able to control the system in the ways that they see fit. Don't like competing with foreign competetion, just claim it's harming you and America and claim we need to control "the beast." Don't morally agree with the decisions made by volutary decision makers that doesn't harm you, no probelm, blame it on "the beast."

By the way, you never answered any of my questions about specific legislation/regulation, such as minimum wages, safety regulation, smoking bans on private property, banning of trans fat, etc. I would really enjoy to hear your outlook on some of these actual laws.

 

[Economist]

More comments on the article:

More generally, many indigenous cultures present ecologically appropriate world views that enjoin people against maximizing present consumption or wealth. For example, most native American cultures only hunted enough animals to satisfy their needs for food and clothing.

Interesting. Some native american tribes even had their own african slaves. I can't think of anything more about maximizing personal wealth at the expense of others than slavery. In fact, even when slaves were freed the US government wasn't allowed to tell native americans what to do, so slavery continued (that is, until the US government made the native americans abolish slavery because they fealt it gave native americans an unfair advantage at selling crops).

Nonmaterialist world views represent a storehouse of alternative belief systems that might serve as partial templates for creating a nonmaterialist, nonconsumption-oriented vision of human nature. Western culture is thereby destroying the visions and values that might serve to temper its excesses. It is almost as if the maximization principle is systematically maximizing its chances of becoming the only vision of human nature.

I hear these claims all the time, and I always scratch my head. It's one thing to say that "westerners" are brain-washed and that's why we like consumerism and material wealth, and in fact, this is a possible explanation. However, that explanation has a hard time explaining the fact that hundreds of millions of people from poor countries try to immigrate to the "western world" every year. I mean seriously, if this is just a "western" phenomenon, then why does border patrol mainly work one way? Why do so many people want to live in these "consumerist societies?"

In 1973, Schumacher warned that "spiritual values" represented our only defense against the hegemony of the maximizing, economic vision.

Some say that these spiritual values in religion that state you shouldn't consume much and learn how to live without, mainly came because most religions started in times were the average person is very poor and therefore people have to learn to cope with this level of absolute poverty. Maybe in the future other spiritual values will start which don't dwell as much on consumption, while still trying to teach people how to be moral and ethical, as well as dealing with lifes hardships.

Thirty years ago in The Population Bomb, Paul Ehrlich accurately foresaw the present population and ecological crises. In summary, the world's population will continue to grow as long as the birth rate exceeds the death rate; it's as simple as that. When it [the world's population] stops growing or starts to shrink, it will mean that either the birth rate has gone down or the death rate has gone up or a combination of the two.

This fails to point out the economic benefits to increased population. If population is such a big factor in standard of living, explain to me again why we are richer today then we were in the past? This analysis fails to realize again, that people are the ultimate resource. This analysis also fails to list how high the population could get, before our standard of living starts decreasing. Is it 6 billion? Is it 10 billion? Is it 100 billion? Essentially, the analysis tells us nothing about how close or far we are to the "maximum."

Basically, then, there are only two kinds of solution to the population problem. One is a "birth rate solution" in which we find ways to lower the birth rate.

Interestingly enough, increases in standards of living tend to decrease birth rates. If the whole world was as prosperous as the US, then you'd see much lower birth rates across the world.

Interestingly, Ehrlich held out hope for a birth rate solution. He implied that, unlike all other species, human beings might voluntary choose to limit the size of our species' population. However, doing so is virtually impossible if we do not believe in some set of values higher than maximization principles. This is especially true if each of us believes the sociobiologists' claim that our role in life is to maximize the number of our genes that make it into the next generation's gene pool.

Wrong. Economists have pointed out that humans choose to have less children as they get richer precisely because they are "maximizing." Essentially, the sociologists are probably right about the benefits of having children. Unfortunately they forgot the cost side. Children are costly because not only do you have to provide for them, but they also take up your time so you'll work less, invest in human capital less, etc. Which one wins out? Well, that's an empirical question, and the current literature all shows that the costs outweigh the benefits which is people actually have less children as their income raises (holding all else constant).

The psychologist Joseph Rychlak documents that humans have a strong tendency to think in dichotomous, either/or terms. However, the difficulty with dichotomous thinking is that in asserting the importance of one position (or value), one might implicitly denigrate its presumed polar opposite.

I think the author may be making the same mistake. He seems to say that "westerners" are maximizers, and they mainly care about money and material wealth. Most people I know are "westerners" but I don't know anyone who only cares about maximizing their financial well being. Everybody I know is a real human being who cares about multiple things at one. They care about being educated. They care about friends, family, and other human relationships. They care about religion, hobbies, sports, etc. They care about their job. They care about health. And yes, they also care about consumption and material wealth. Generally, one has to balance all these wants because there is no way to pursue them all at one time. This is precisely why different individuals make different choices, because some value one variable more than another. Even though having a kid seriously harms a woman's money-making ability, many women still get married and have children. Why? Because they are maximizers, and they value family to some degree (in fact, they value family enough in order to make the trade-off of income).

I think it is weird that a psychologist would try to boil everybody down to maximizers who only care about money, and they only care about money because they are culturually brainwashed. He wants to point to what he thinks are problems with economics as a discipline. Well, maybe one could accuse him of suffering from a psychology bias of seeing everything as a psychological problem that needs an expert to solve (this is referred to as the medical model).

One might see this essay as an ode to the golden mean - a plea for moderation to oppose the idols of our radicalized age. I hope Notre Dame's football team has a very good year, but I believe it would be a mistake for any of us to take time, effort, or attention away from our educational, spiritual, and social missions to fanatically chase an undefeated season.

Is this guy kidding? How on Earth would you claim that a school like Notre Dame only (or even mainly) just cares about it's football team. It's a great school with great academics. Furthermore, many people at that school care a lot about religion. There may be a lot of hard-core Notre Dame football fans there, but I highly doubt people jepordize everything else in their lives for Notre Dame football. Besides, he makes it sound as though Notre Dame football fans are the only ones this intense. Watch any D-1 college football game on a Saturday or any pro-football game on Sunday and you will see plenty of huge fans. I wonder if he would accuse Europe of letting soccer get in the way of their ecological, political, personal, etc goals.

 

[Economist]

More on the article.

Interestingly enough, the article mentioned a scientist named Paul Ehrlich who wrote "The Population Bomb." Funny thing is, Ehrlich and an economist made a bet about the price of resources that economist Julian Simon won.

I have heard about this before, but I ran across it today so I decided to post it.
http://mjperry.blogspot.com/2008/02/would-julian-simon-have-won-second-bet.html

George Mason economist Don Boudreaux, writing today ("The Ultimate Scholar") in honor of resource economist Julian Simon, on the 10th anniversary of his death, revisits the famous bet in 1980 (it even has its own Wikipedia listing: "The Simon-Ehrlich Wager") between scientist Paul Ehrlich and economist Simon:

Stanford University's Paul Ehrlich -- author of "The Population Bomb," foretelling disaster from population growth -- found economist Julian Simon's optimism about population growth to be so absurd that he famously accepted a bet from Simon in 1980.

The essence of Simon's position in the bet was that, despite the population growth that was sure to occur during the 1980s, the effective supply of natural resources would increase during this decade because human beings would figure out how to find, extract and use such resources more efficiently.

And the surest measure of this increased supply would be lower inflation-adjusted prices of resources.

Convinced that higher population is a curse, Ehrlich accepted the $1,000 bet. He chose (for Simon gave Ehrlich the choice of which resources to bet on) a bundle of copper, chromium, nickel, tin and tungsten and bet Simon that the real price of this bundle of resources would be higher in 1990 than in 1980.

In 1990 the prices in September of that year were compared to the prices of these resources in September 1980. Simon won convincingly. The real price of each of these five resources had fallen over the course of that decade, indicating that their supplies had grown even though human population had also grown by more than 800 million during that same time.

Julian Simon wanted to enter into a second wager, based on either the same commodities, or a different group of commodities, but the terms of a proposed second wager were never agreed upon. Simon died in February 1998.

What if the original bet had been extended for another ten-year period, from 1990-2000? Simon would have won again (see chart above), since all of the metals declined in real price except for tungsten, and the average price decline of the 5-commodity group was -19%.

 

[CaptainQuasar]

What do you mean "ongoing corporate crime?" Explain to me all this corporate crime currently taking place.

If you're seriously proposing that there is no corporate crime going on right now, say so and I'll give you some examples.

Ok, explain to me scenarios in which companies had a chance to make higher profits precisely by screwing so many people over.

Enron. Love Canal. The Radium Girls. Asbestos manufacturing. The privatization of the Soviet oil and gas industry. Google them yourself.

It's silly to ask me to demonstrate that companies screw people over for higher profits. Try telling an economic historian that companies don't screw people over for higher profits and see how he or she reacts. Anyone, anywhere would react the same way. (And here's a hint: the reaction I'm talking about isn't “Oh! What a clever and sagacious insight!”)

By the way, you never answered any of my questions about specific legislation/regulation, such as minimum wages, safety regulation, smoking bans on private property, banning of trans fat, etc. I would really enjoy to hear your outlook on some of these actual laws.

I didn't answer them because they're obvious attempts to drag me into a debate that has nothing to do with whether or not companies have a duty to promote the public good. You already tried tossing up some red herring about me saying all legislation is perfect and you got your answer to that.

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[Economist]

If you're seriously proposing that there is no corporate crime going on right now, say so and I'll give you some examples.

I'm not saying there is none, just that there is probably a very small amount of it. Why is there a very small amount of it? I think we just have different opinions on answering this question. I say it's mainly a result of companies pursuing their own self-interest (through profits) and therefore they generally have incentives in line with their customers (which generally doesn't involve screwing over others). I think your answer to the question would be that legislation has mainly kept these people in check.

Enron. Love Canal. The Radium Girls. Asbestos manufacturing. The privatization of the Soviet oil and gas industry. Google them yourself.

I looked up Love Canal and The Radium Girls, and they were both a long time ago. These are definitely the type of cases in which the legal system is very important. Essentially you have people directly harmed by the company, and therefore they should be allowed to sue. A few things which could influence the outcome though, is wether the company and the employees knew about the harmful effects of the product. For example, if the company didn't know then maybe they wouldn't be forced to pay (although in my opinion they probably should still pay). Or if the workers knew about the harmful effects, then in my opinion they definitely shouldn't be compensated.

With asbestos I am under the impression that the health issues were not known for a long time. Sometimes products are dangerous, but the effects are not completely known. In situations like that, it doesn't seem like it's exactly a company trying to harm people for higher profits, but rather the negative effects were not understood.

Enron is the more recent one. I had a feeling you would list it because anytime I ask someone this question they always list Enron (I think in part because these situations are pretty rare so people are hard-pressed to list many others). I agree that Enron is a perfect example of recent corporate crime, however my point is mainly that "the Enrons" are few and far between.

John Stossel has made some interesting comments about Enron. Stossel points out that it was actually the private sector which discovered the fraud, because of auditors and especially decreasing stock prices. I don't know a lot about the details, so for all I know Stossel is mistaken.

Don't you agree though that Enron was also incredibly bad for business? I mean, they went bankrupt, and their accounting firm went bankrupt. It's not like all the top dogs at Enron were aware of what was going on. I agree that it was horrible and I believe they all got what they deserved. However, my point is that the Enron situation is rare, and there are probably few (if any) companies trying to emulate what Enron did.

I didn't answer them because they're obvious attempts to drag me into a debate that has nothing to do with whether or not companies have a duty to promote the public good. You already tried tossing up some red herring about me saying all legislation is perfect and you got your answer to that.

You don't have to answer them if you don't want. I just remember asking you a question, and you stated that if I answered them first you would answer. But I don't care if you'd rather not.

 

[CaptainQuasar]

I'm not saying there is none, just that there is probably a very small amount of it. Why is there a very small amount of it? I think we just have different opinions on answering this question.

Perhaps. I would say that there must be an immense amount of corporate crime going on all over the world all the time. As much as crime perpetrated by individuals if not more. I would expect that corporate crime is less likely to be revealed than individual crime but even so many incidents of it happening on a massive scale have been uncovered anyways.

And your idea of a commercial organization pursuing its self-interest without regard to the public good matches criminal organizations like mafias and gangs too, not just above-the-board companies.

Of course the other point we disagree on is whether companies are even supposed to look out for the public good in the first place. Like I said, even if it was in their nature somehow to not commit crimes (which I certainly don't believe) this would not free them of the obligation to promote and avoid damaging the public good.

John Stossel has made some interesting comments about Enron. Stossel points out that it was actually the private sector which discovered the fraud, because of auditors and especially decreasing stock prices. I don't know a lot about the details, so for all I know Stossel is mistaken.

Don't you agree though that Enron was also incredibly bad for business? I mean, they went bankrupt, and their accounting firm went bankrupt.

I didn't say that Enron wasn't bad for business. I mentioned corporate crime like this in response to your assertion that businesses don't plunder and kill.

The reason why Enron happened was because they were voraciously pursuing their self-interest with disregard to the public good and because they found things they could do that were outside of the supervision of the law and federal financial regulations. I would recommend the documentary http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the_Room" about it.

I get the impression that you're still in school. I think perhaps that if you ever get to watch a professional sales team operating from the inside like I have, and witnessed the casual way an entirely legitimate business is ready to lie to, manipulate, and defraud their customers and potential customers, you might have a different perspective on this.

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[Economist]

As much as crime perpetrated by individuals if not more. I would expect that corporate crime is less likely to be revealed than individual crime but even so many incidents of it happening on a massive scale have been uncovered anyways.

Maybe you're right. I'm just very skeptical. Especially considering the way the media, politicians, and probably the population at large loves to villify corporations.

And your idea of a commercial organization pursuing its self-interest without regard to the public good matches criminal organizations like mafias and gangs too, not just above-the-board companies.

Well, one reason that gangs and mafia activities can even take place in the first place is precisely because of black markets. When certain goods (drugs for example) and services (prostitution gambling for example) are illegal, but people want them, then an illegal underground economy will pop up in order to satisfy these consumer demands.

Of course the other point we disagree on is whether companies are even supposed to look out for the public good in the first place. Like I said, even if it was in their nature somehow to not commit crimes (which I certainly don't believe) this would not free them of the obligation to promote and avoid damaging the public good.

Essentially, I just believe that they should not be able to enchroach on peoples rights. They have no obligation to go above and beyond that, although they can if they want to.

The reason why Enron happened was because they were voraciously pursuing their self-interest with disregard to the public good and because they found things they could do that were outside of the supervision of the law and federal financial regulations.

Yeah, they were pursuing their self-interest but it didn't work out to well for them, as they ended up broke and in jail. So in the end, their actions did anything but benefit them.

I get the impression that you're still in school. I think perhaps that if you ever get to watch a professional sales team operating from the inside like I have, and witnessed the casual way an entirely legitimate business is ready to lie to, manipulate, and defraud their customers and potential customers, you might have a different perspective on this.

I am still in school. However, I've actually done some work in sales, as I was a telemarketer and car salesman (both for bried periods of time). I agree that sales can be shady businesses were workers sometimes (but not all the time) try to manipulate and trick people for their personal profits. However, I would also like to point out the numerous very successful salespeople who don't act this way, and in fact act with honesty and integrity (which is why they've made enjoyable long term careers out of the business). Lastly, and perhaps even most imporantly, customers already know this and therefore have their gaurd up. Furthermore, often times the customers are trying to manipulate and trick the sales people just as much. In the end, both sides self-interests are bounded by one another and the deal generally doesn't take place unless it is mutually beneficial to both parties.

By the way, did you watch that video I posted a link to? It's very interesting, and I think you'll get a much better sense of my position if you watch it. Furthermore, it's educational.

 

[CaptainQuasar]

I went and took a look at the video. Both it and the site definitely look interesting. I'll put aside an hour to watch it at some point.

Well, one reason that gangs and mafia activities can even take place in the first place is precisely because of black markets. When certain goods (drugs for example) and services (prostitution gambling for example) are illegal, but people want them, then an illegal underground economy will pop up in order to satisfy these consumer demands.

Yeah, but the point is that gangs and mafias definitely murder and plunder at will. There isn't any innate mechanism in markets or capitalism that promotes and protects the public good, things like preventing encroachment on rights is something that has to be forced on a capitalist system from the outside or the players in it will willingly and unhesitatingly disregard those things.

Essentially, I just believe that they should not be able to enchroach on peoples rights. They have no obligation to go above and beyond that, although they can if they want to.

You get into issues like negligence where they have to do more than simply avoid doing certain things. But maybe it's a fairly similar conception.

Yeah, they were pursuing their self-interest but it didn't work out to well for them, as they ended up broke and in jail. So in the end, their actions did anything but benefit them.

No, on the contrary, the actions they took in craven self-interest made them unbelievably rich and powerful for a decade. The only reason it ever amounted to a down-side is because they went a little bit too far and didn't fall back and retrench their gains. Enron is not some sort of parable that the bad guys will always get caught, they very well could have gotten away with it all. But even if they had they would have still been defrauding the government, putting countless people in harm's way, and would have promoted widespread corruption. Not to mention that at least one guy either was killed or killed himself because of it.

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[Economist]

I went and took a look at the video. Both it and the site definitely look interesting. I'll put aside an hour to watch it at some point.

Yeah, after you watch that one you should check out the rest. They're really interesting (I especially like the debates at the end). You might not agree with some of Friedman's points, but he does a great job of laying out his case.

 

[Dale]

Yeah, but the point is that gangs and mafias definitely murder and plunder at will. There isn't any innate mechanism in markets or capitalism that promotes and protects the public good, things like preventing encroachment on rights is something that has to be forced on a capitalist system from the outside or the players in it will willingly and unhesitatingly disregard those things.

I agree with you on this point. This is essentially why the Libertarian ideal of freedom is not the same as anarchy. There must be some mechanism for protecting individuals and groups from injury and fraud of other individuals and groups.

A group of individuals, whether it be a gang or mafia or corporation or government, is no more or less moral and honorable than the individuals that compose the group. I think that Economist may be objecting to an all too common characterization of corporations as inherently malicious and the worse characterization of profit as inherently immoral. I have a fairly optimistic world-view so I tend to think most individuals are basically good until they demonstrate otherwise, and therefore most groups of individuals are also basically good.

 

[CaptainQuasar]

I agree with you on this point. This is essentially why the Libertarian ideal of freedom is not the same as anarchy. There must be some mechanism for protecting individuals and groups from injury and fraud of other individuals and groups.

I don't know much about Libertarianism but this seems like a very salient way to articulate it. Bravo!

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[OmCheeto]

I didn't know where to put the following little revelation, but this old thread seemed close enough to the topic.

I saw a post by Astronuc a while back that the current Iraq war was going to cost about a trillion dollars. I did the calculations the other day and found that if that money had been invested in solar panels vs. the war, half of the electricity in America would be generated by those solar panels. Today, while looking for the answer to how much money the US government had invested in solar energy, I ran across the following:

http://www.sciam.com/article.cfm?id=a-solar-grand-plan&page=1
...
If wind, biomass and geothermal sources were also developed, renewable energy could provide 100 percent of the nation’s electricity and 90 percent of its energy by 2100.

The federal government would have to invest more than $400 billion over the next 40 years to complete the 2050 plan. That investment is substantial, ...

Why is it that we barely flinch at spending a trillion dollars in 10 years, but 400 billion dollars invested over 40 years is a "substantial investment"?

 

[CaptainQuasar]

We could also drain the Great Lakes and fill them with Cheetos. (Just kidding, point well taken about how much of a waste it is and what other problems we could solve for the same price. Much less for the same sacrifice of lives.)

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[Dale]

Or we could stop wasting all that money on the various redistribution of wealth programs and then we could buy several more Iraq wars!

 

[russ_watters]

I didn't know where to put the following little revelation, but this old thread seemed close enough to the topic.

I saw a post by Astronuc a while back that the current Iraq war was going to cost about a trillion dollars. I did the calculations the other day and found that if that money had been invested in solar panels vs. the war, half of the electricity in America would be generated by those solar panels.

I'm not sure where you got the numbers for that calculation, but it doesn't look right to me. We recently discussed this here: https://www.physicsforums.com/showthread.php?t=217933&page=5

About the best we can expect in the near term for an installed cost solar panels and associated hardware is $5/watt. Note, that's not a real number - it isn't possible yet (currently, it's more than $7/watt). Backing that up with something else (like gas turbines) for when the sun is shining will add a few dollars to that as well.

The total US generating capacity is a little over 1,000,000 megawatts: http://www.eei.org/industry_issues/industry_overview_and_statistics/industry_statistics

Assuming $5/watt, $1 trillion will get you 200,000 megawatts or 1/5 of that.

I don't know why Sciam is talking about these exotic plans using nonexistent technology: nuclear power is here now and it works just fine. We should use it: at $1.85 (unless we cut some of the BS they have to go through to build the plants - then it could be less)

 

[OmCheeto]

I'm not sure where you got the numbers for that calculation, but it doesn't look right to me. We recently discussed this here: https://www.physicsforums.com/showthread.php?t=217933&page=5

About the best we can expect in the near term for an installed cost solar panels and associated hardware is $5/watt. Note, that's not a real number - it isn't possible yet (currently, it's more than $7/watt). Backing that up with something else (like gas turbines) for when the sun is shining will add a few dollars to that as well.

http://www.wholesalesolar.com/specials.html?gclid=CJjUhbHMo5ICFRWkiQodGliDMw#mitsubishis?source=google
$620 / 130 watts = $4.77 per watt

The total US generating capacity is a little over 1,000,000 megawatts: http://www.eei.org/industry_issues/industry_overview_and_statistics/industry_statistics

Assuming $5/watt, $1 trillion will get you 200,000 megawatts or 1/5 of that.

Ooops. Just redid the calculations and see that you are correct.
A trillion dollars worth of solar panels will only produce 1/9th of our electrical needs.

Perhaps my thoughts are on another spreadsheet.
A graph on the following site:
http://www.nppd.com/My_Home/Product_Brochures/Additional_Files/electric_usage.asp
implies that 62% of electricity is used to heat something.
You don't need photovoltaic's to produce heat.
This is far more economically done with much cheaper thermal collectors.
This may be where I can up with half.
I post to 5 different forums and may have explained it somewhere else.
Sorry!

I don't know why Sciam is talking about these exotic plans using nonexistent technology: nuclear power is here now and it works just fine. We should use it: at $1.85 (unless we cut some of the BS they have to go through to build the plants - then it could be less)

1E+12 dollars spent on the Iraq war
5 dollars per watt
2E+11 watts we could be producing right now
6 average hours of good sunlight per day
365.25 days in a year
4.383E+11 kw hours we’ve not been producing a year
0.1 cost of an average kilowatt-hour
$43,830,000,000.00 annual production by the panels in dollars
22.8 years to recoup our trillion dollar investment

What we are going to get with our trillion dollar investment in Iraq: ?

I don't really know the answer.
But the thread title kind of implies the correct question, in my feeble mind anyways.

 

[mulp]

Quick comment on the solar power point - PV is not the solution anyone is proposing. Wind is competitive in many places but can't be stored easily. But solar heat can be stored and at least a dozen competitve engineering solutions are being actively pursued that concentrate and store heat so power can be generated by steam using conventional equipment even after the sun goes down. Of course, the cheapest power is often that not consumed, and many opportunities exist for that.

The cost of solar heat isn't competitive with the highly subsidized fossil fuel power, but the big bill for fossil fuel will come due after I'm dead. After all the old guys trying to bring awareness to the mandate for sustainability, after my Woodstock generation is dead, after Reagan is dead, after Carter is dead.

But sustainability is mandatory.

 

[mulp]

This totally neglects the idea of trade-offs. Since this thread is related to environmental issues, it should be pointed out that the optimal level of pollution is not zero pollution. Do you realize that it's impossible to enjoy even a modest standard of living without some level of pollution? Do you really expect some of the poorest nations to not become industrialized at the expense of increasing their "carbon footprint?" Do you also realize that in order to escape poverty and have a higher standard of living (which includes non-material things like education, literacy, life expectancy, increased nutrition, more leisure time, etc) they would probably have to pollute more than they currently are?

Well, as long as you expect civilization to end soon, you can take that point of view.

But let's make this more personal. There is no reason for you or anyone else to clean the room you live in. Doing so and maintaining zero pollution, the accumulation of unwanted dirt, trash, would demand you live less well, for you to sacrifice your lifestyle, to become impoverished, so you should only clean some of the trash, some of the dirt, you create. And you can never move.

After all, only a little dirt and trash accumulate so it can't be a problem. What harm can .001 inch more of dirt a day do. You will never notice it. Why waste time when you only have so much time in your four years of college, so why waste time cleaning something you will never notice.