Society

Anarchy Boomtime

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In Newsweek, Silvia Spring marvels that the Iraqi economy appears to be booming even while the country remains mired in violence.

People are often surprised that economies can thrive without a high degree of politically enforced social order, but history tends to show that too much government is more likely to cause economic stagnation than too little. Most 3rd-world business people face the worst of both worlds. The government does a very poor job of providing physical security and a fair judiciary (important to enforce contracts), yet it imposes strangling taxes, jealously guards its prerogatives to decide who can and cannot engage in any particular economic activity, and individual government agents usually extort vast sums. As a result, the descent of a country into mild anarchy usually improves the situation. The actual security situation may not be that much worse, but all the parasitic government activity disappears. The situation turns into a net gain. It is quite common to read reports from 3rd-world countries during a civil war that shops and other businesses seem more full and busy than they did in time of “peace.”

The legendary economy of Hong Kong from 1945 to 1999 arose in large part due to the laissez-faire approach that the British government blundered into as a result of geopolitical concerns. The British needed to keep Hong Kong as a full colony to protect it, but that meant they could not allow a full fledged local democracy with the moral authority to impose a welfare and regulatory state. So they ended up with just a bare-bones government appointed by Britain that never tried to lay its hand too strongly on the people of Hong Kong.

Business people in Iraq find themselves in something of the same environment. The occupation government did not wish to get involved in potentially contentious economic policy, and the same lack of experience and consensus that keeps the newly elected Iraqi government from wiping out the insurgency also prevents it from implementing destructive economic policies. Left to their own devices and with huge pent up demand the Iraqi people are driving their economy strongly forward.

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Simbabwe 1.6

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Have you ever wanted to be a 3rd-World kleptocrat, pillaging your people and driving the entire economy into the ground? Boy, who hasn’t?

Now you can! If you have a Mac just download Simbabwe 1.6 and let your inner monster run wild!

Simbabwe stands for SIMulated zimBABWE. In the game, you get to play Robert Mugabe and have a chance to see just how fast you can wreck a formerly prosperous country.

Hopefully, the developers will soon come out with Simezuela and we can all find out how long it takes us to wreck a South American country’s oil infrastructure.

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Why They Hate Us

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Personal choices reveal our assumptions about human nature and how we see the great historical cycles. Or perhaps this is just how I see it, since our culture has benefited from an internalization of values & sense of personal responsibility. We see these as the mark of maturity – both in a man and in a civilization. Of course, temptations are constant from such a perspective, but this also gives us empowering choices.

Ray Fishman and Edward Miguel’s “Cultures of Corruption: Evidence from Diplomatic Parking Tickets” give us a clue to analyzing whether a nation has internalized its respect for property and the rule of law. I suspect it mainly reveals whether the world is viewed in tribal terms (us & them, those entitled & those not). Those entitled, of course, are not expected to observe the customs of other countries.

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I’ve Got Your Methane Right Here, Pal

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A couple of observations on Global Warming brought on by a new-to-me blog Pseudo Polymath. First, he cites a Taipei Times article that reminds me of a journal article that I have in my office. It seems that when Mickey Ds changed over from the styrofoam shells to paper shells for their greaseball hamburgers, they negelected to account for the production energy costs of paper (high) versus styrofoam (low). The net result of the change was either a wash, or a net loss for the environment, depending upon which end of the error bar you take your figures from. Yet the eco-weenies hailed this as a victory.

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“Temporal Bigotry”

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David Foster reposts a classic post that ties together the Thanksgiving holiday, some thoughts about what people knew in the past and what they know now, and reflections on the state of modern education.

It’s tempting to assume that people know more now than they did in the past. In one sense this assumption is true, since the state of knowledge in many fields advances over time. However, it is not necessarily true for knowledge held by individuals. In the past, many activities, from farming to driving a car to trading shares to doing scientific experiments, required a great deal of specialized knowledge that is no longer necessary. Automobiles, for example, are more complex than they used to be but are also much easier to operate. The automobile designer knows more but the driver needs to know less. This is a good situation because the driver now has more time to spend on activities where he is more productive.

However, “activities where he is more productive” is the crucial point. If many people are not well educated — educated in the sense of understanding and knowing how to do things, not in the sense of formal schooling — they will not be very productive despite the availability of efficient, easy to use, time-saving modern technologies. That is why effective education is so important, and why our intellectually decrepit system of primary and secondary education is a national scandal. It’s also why the hubris of people who think we moderns know better is destructive.

We don’t know better. Human nature hasn’t changed. We know some things that our ancestors did not know. However, the converse is also true, and if we forget it we will keep reinventing the wheel. Knowing history is an important part of being educated, not only because it’s good to honor the people who came before us, and who built the world that we take for granted, but also because if we don’t know what people did in the past we will needlessly repeat many of their mistakes. This is as true on an individual level as it is in geopolitics. We forget it at our peril, and too many people have forgotten it.

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