Ferraris for all

Interesting figures on the “great divergence” - the huge widening in global inequality following the Industrial Revolution - from the annual economics symposium at Jackson Hole held by America’s Federal Reserve. According to a paper by Anthony Venables (PDF), a professor of economics at the London School of Economics: “the ratio of per capita incomes of the richest to the poorest nations increased from around 8:1 in 1870 to more than 50:1 in 2000.” Of course it would be wrong to conclude from these statistics that economic growth should be rejected. On the contrary, the poorer countries need more growth so that they can catch up.

For anyone interested more generally in the world economy the papers at Jackson Hole look worth reading.

Labels: economics, growth, inequality, progress

It is unusual for environmentalists to want to discuss the viability of geoengineering - large scale projects designed to modify the climate - as a solution to global warming. Normally they emphasise that curbing emissions of greenhouse cases must be central to any strategy of dealing with global warming. Greens are loath to give credibility to any alternative strategies for dealing with the problem.

But yesterday George Monbiot launched a scathing attack on geoengineering in one of his regular Guardian columns. No doubt he was partially motivated by the fact that such a scheme was recently proposed by Paul Crutzen, winner of the 1995 prize for chemistry, in this month’s issue of Climatic Change. Crutzen suggests pumping sulphate particles into the stratosphere to help counter global warming. Monbiot - who is not a scientist - counters that declining rainfall would mean that hundreds of thousands of Africans could die of starvation as a result.

But to me the word “responsible” in the following paragraph from Monbiot’s article is the giveaway. His main concern is not the science but upholding a morality based on lower consumption:

“The only responsible way to tackle climate change is to reduce the amount of climate-changing gases we emit. To make this possible, we must suppress the political and economic costs of the necessary cut (added emphasis).”

Monbiot’s book on climate change is published by Penguin next month

Labels: climate, consumption, economics, environment, geo-engineering

Monitoring the alleged sins of modern life

Tap water is sinful according to CityAM, a free daily newspaper for those who work in the City of London, especially if it is hot. An article in today’s issue warns:

“It appears that some carcinogenic industrial solvents such as benzene and methylene chloride can be present in tap water and can pass through the skin. The worst part is that, as water warms up, these carcinogens become gasses and are then easily inhaled.”

Nothing about the concentration of such carcinogens or how frequently they can be present in tap water. Just a warning to keep showers short or preferably buy a special shower filter from www.healthproductsforlife.com.

Labels: sin tracker, technology

I discover today that the campaign against Coca-Cola and Pepsi-Cola has spread to Britain and America. A report in the Independent on 19 August said Sussex University was the first campus in the country to ban all Coca-Cola products from its students’ union:

“The decision to withdraw Coca-Cola from the university comes at a time when its products have already been banned in schools, as concerns rise about rates of obesity among children. Universities in the US have also banned Coca-Cola and a quarter of states in India have outlawed products following concerns that they contain 27 times the permitted levels of pesticides.

“Campaigners also claim that bottling plants in India have depleted local water tables and deprived farmers of their livelihoods. In Colombia and other South American states, the company has been accused of ignoring anti-union abuses at its factories.”

There is meant to be a campaign group called UK Students Against Coca-Cola but I cannot find a website for it.

Labels: consumption, corporations, india

It seems to me that growth scepticism is a central part of Indian nationalism. Most obviously there is the symbolism of the flag – which I will not go into now – and the legacy of Mahatma Gandhi.

Contemporary India also has prominent environmental campaigners including Medha Patkar, Arundhati Roy and Vandana Shiva. One of their main focuses is the Narmada dam project.

This week’s Economist (26 August) has a profile of Sunita Narain, head of the Centre for Science and Environment based in Delhi, which is backing the campaign against Coca-Cola and Pepsi (see 11 August dispatch). Meanwhile, yesterday’s London Times reported that Indian campaigners are running a “safe festivals” campaign. Devotees of Ganesh, the elephant-headed god, are being urged to make their idols out of traditional unbaked clay rather than toxic plastic.

Labels: Asia, environment, india

Monitoring the alleged sins of modern life

An excellent piece by Sean Collins on Spiked on the "sin" of shopping at Wal-Mart. Evidently America's Democratic Party, divided on many issues, is united on hatred of the giant superstore. Two union-backed campaigning groups are spearheading the campaigning against the shopping giant (branded as Asda in Britain).

Collins warns that:

“the anti-Wal-Mart crusade is a faux populism - as fake as the knock-offs Wal-Mart sells. It shares with other campaigns against politically incorrect retailers - such as McDonald’s and Starbucks - a disdain for mass marketers and, most importantly, the masses who shop with them. But what's different, and potentially confusing, about the anti-Wal-Mart movement is that it is snobbery masquerading as a populist campaign for higher pay levels.”

Collins goes on to examine the broader significance attached to shopping nowadays: you are what you buy. He also explains how the middle class has a convenient get-out clause:

”Wal-Mart finds itself at the sharp end of a wider attack on mass consumption patterns. Personal shopping decisions have now become invested with greater significance, as they are now considered as indicative of one's identity (as opposed to, say, political or religious views). Items associated with the masses are considered taboo today: SUVs, McMansions, fast food. Such criticisms are the means by which to blame those who mindlessly buy offensive things. At the same time, the elite are able to buy their way out of this, through alternative, eco-friendly, ethical spending.”

Labels: America, consumption, corporations, sin tracker, spiked

Monitoring the alleged sins of modern life

This is the first of my Sin Tracker columns in which I discuss specific targets for attacks on modern living by environmentalists. There are plenty of candidates for future columns including eating cheap food, using too much water, buying cheap goods, driving cars and going on holiday abroad. Additional suggestions are welcome. But this dispatch will focus on the hot topic of air conditioning.

Prospect magazine’s September issue includes an entire essay by James Fergusson , a British writer, on why air conditioning “while liberating us, increasingly threatens us too”. For Fergusson air conditioning belongs alongside the aeroplane and car as destroyers of the environment:

“There is a piece of 20th-century technology—seldom discussed or even noticed because it is practically invisible when working as it should—which has played a role in shaping the modern world almost as big as the motor car or the aeroplane. Its contribution to carbon emissions and climate change has been just as disastrous, in its way, and is set to make an even bigger impact in the near future. Step forward, please, the humble air-conditioning unit.”

Despite its heavy use of electricity (a terrible sin apparently) he is balanced enough to acknowledge the role of air conditioning in economic development:

“Since the 1950s air-conditioning has been partly responsible for the economic development of America's sunbelt, internal migration towards which continues to this day. Never mind the cowboys out west: aircon was how the south was won. The same is true of many other parts of the world. The financial centres of Japan, the capitals of the Asian tiger economies, the hubs of the Gulf like Dubai—all would be almost unthinkable without temperature control. So too would the software that links and underpins them, since computer technology does not function well in hot and humid conditions. Without air-conditioning, the information superhighway would buckle in the heat.”

Environmentalist attacks on air conditioning were anticipated by Mick Hume, the editor of Spiked, in an article in the Times (London) on 28 July. According to Hume:

“Verily, they want us to suffer for our sins. The old puritans cautioned only that we would burn in Hell in the next life. The neo-puritans tell us we must burn on Earth in this one.”

Labels: climate, environment, sin tracker, spiked, technology

The idea of a global water shortage seems particularly odd. There is so much of it in the world and it is the ultimate recyclable commodity - once it is used it can often easily be reused. Yet much of the reporting of the World Water Week in Stockholm suggests there is a global water shortage.

The idea of a water shortage is certainly being pushed by the World Wildlife Fund (WWF). A press release from the organisation quotes Jamie Pittock, director of WWF’s Global Freshwater Programme, arguing that: “Economic riches don’t translate to plentiful water.” But surely they do. It is hard to imagine the inhabitants of Arizona or Texas having to do without water.

There also other hints at how resources could help develop water supplies. A press release from the Consultative Group on International Agricultural Research (PDF) quotes Frank Rijsberman, director general of the International Water Management Institute, saying: “one billion people live in river basins where water is economically scarce - water is available in rivers and aquifers, but the infrastructure is lacking to make this water available to people.” In such cases surely the solution is to build the necessary infrastructure? Rijsberman does make substantial concessions to environmentalist thinking but these cannot be examined here. Something to examine for the future.

Labels: economics, environment, technology

A useful reminder in today’s Wall Street Journal Europe (subscription required) about the scourge of malaria and how it can be solved by economic development. Evidently malaria afflicts half a billion people a year and kills a million of them. One way to deal with the disease it to spray DDT, a pesticide, but such action is vetoed by environmentalists. The article also quotes Roger Bate, of Africa Fighting Marlaria, explaining the link between fighting malaria and economic development:

"We eradicated malaria in Malaysia in the '50s and '60s, and in Singapore at the same time. It came back in Malaysia in the '70s but not in Singapore, and the reason it came back is that there wasn't enough wealth for people to have screens on the windows. Singapore's economy, however, grew rapidly, and there isn't a problem there anymore."

Labels: Asia, development, health, progress, technology

Not long after discovering “crunchy cons” (green conservatives) it seems we now have crunchy cops. Or as an article in today’s London Evening Standard puts it: “Now the boys in blue are going green”. Evidently the Metropolitan Police:

”has ordered its first hydrogen powered patrol cars which emit no exhaust and run almost silently. Meanwhile it is already using almost 100 cars with cleaner diesel / vegetable oil engines.”

The politically correct PC is a long way from the stereotype of the sandal-wearing, long-haired leftist which used to be seen as the typical green.

Labels: environment, ethics

James Harkin, in his always interesting Saturday Guardian column, writes about Fred Hirsch’s theory of “positional goods” from the 1970s. In the Social Limits to Growth (1976) Hirsch argued the main problem of scarcity was social rather than physical. The world may not, for example, run out of coal. However, only a limited number of people at any one time can own a particular house with a beautiful lakeside view or run a corporation. Or as Harkin puts it: "Since the supply of unspoilt beauty is fixed, my lakeside holiday cottage with a pristine view of nothing but water, mountains and sky is diminished when everyone else arrives to build their own cottages." Hirsch’s theory, while profoundly wrong, is far more sophisticated than those of contemporary environmentalists.

Labels: environment, happiness

The Guardian also has a review of Planet of Slums by Mike Davis. Ian Sansom makes the now common point that sometime soon the number of urban dwellers will outnumber the number the world’s rural inhabitants for the first time in human history. Sansom goes on to argue that:

“this is bad news, because the cities that Davis examines and describes are not the rich, vibrant cultural centres beloved of Sunday-supplement dandies and middle-class flâneurs, but vast "peri-urban" developments, horizontal spreads of unplanned squats and shantytowns, unsightly dumps of humans and waste, where child labour is the norm, child prostitution is commonplace, gangs and paramilitaries rule and there is no access to clean water or sanitation, let alone to education or democratic institutions.”

What Sansom forgets is that, bad as conditions in urban slums may be, conditions in rural areas are often worse. People in the third world are migrating to the cities for a reason. The challenge is to raise everyone’s living standards rather than attack third world city-dwellers.

Labels: cities, development

It seems that even the Wall Street Journal - one of the closest things there is to a true neocon organ - is going ethical. Or at least the Weekend Journal supplement to the Wall Street Journal Europe (WSJE) has a guide to consuming with a conscience. For those who have the cash ethical brands include Giorgio Armani (clothing and accessories for Product Red ), Katherine Hamnett (a range of clothing and accessories that is “ethically made and as environmental as possible”), Izze Beverage Company (all-natural juice drinks), Green & Black’s (organic chocolate) and Kuyichi Europe (making fair trade and environmentally friendly materials cool).

Meanwhile, while the rich go ethical the consumption of Champagne, once seen as a drink primarily for the rich, is increasingly seen as vulgar. The WSJE also has an article from London on how Champagne is becoming popular with “chavs”. Apparently the Oxford English Dictionary defines these as young people characterised by: “brash and loutish behaviour and the wearing of designer clothes”. But to me it seems like a snobbish term to describe - and deride - ordinary young people.

So for the rich consumption can be OK as long as it is blessed with an ethical tag. For the rest of us to aspire to the best in life is uncouth or even uncool.

Labels: consumption, ethics

An interesting article from Newsweek (August 14) on how environmentalism has gone mainstream:

“Something weird is happening in the once marginal world of environmentalism. The green cause is no longer the preserve of woolly-minded liberals and fringe activists. Its tenets are being actively pursued by business leaders, stockholders and investment managers.”

In fact in my view environmentalism went mainstream in the 1970s but now conservative politicians are embracing it more openly than ever. As Newsweek argues:

“Conservative politicians once skeptical of the green movement have been reacting to the pressure. Last week, California's Republican Gov. Arnold Schwarzenegger met with British Labour Prime Minister Tony Blair to promote the idea of a transatlantic carbon-emissions market. He also wants to reduce his state's greenhouse-gas emissions to 80 percent below 1990 levels by 2050. David Cameron, the new leader of Britain's Conservative Party whose revamped slogan is "Vote Blue, Go Green," has visited the Arctic to see firsthand the effects of global warming. He cycles to work, and is redesigning his Edwardian house in London to include a wind turbine and solar panels, which will cut energy use by 30 percent. In Germany, the Greens and the conservatives recently agreed to join forces to run the city government of Frankfurt, the first such coalition in the country's history. President Jacques Chirac of France is promoting a new "solidarity" levy to be paid by all air travelers.”

Crunchy Cons - to use a term coined by Rod Dreher - seem to rule much of the world.

Labels: America, environment, Europe

Nowadays it is easy for those in the developed world to forget how positively the acquisition of consumer goods was once viewed. It sounds like Consuming Passions: Leisure and Pleasure in Victorian Britain (Harper Press), a new book by Judith Flanders, helps to explain why. According to a review in the Observer:

“In the 17th century it was not unusual for a poor, rural household to own no more than two or three pots, a knife apiece and a cup between them. By 1715, 90 per cent of families had a clock, and by the end of the 19th century comparable households lived in cottages filled with 'Victorian clutter'. By 1910, there was one piano for every 10 to 20 people.”

Evidently Emile Zola, a leading nineteenth century French author, also celebrated capitalism, commerce and consumerism in The Ladies' Paradise (Au bonheur des dames, 1883).

Labels: book, consumption, progress

Do jihadis attack planes precisely because they are symbols of modernity? That is the argument of Michael Clarke, professor of defence studies at King’s College, London, in an article in Saturday’s Times (London):

“Commercial aircraft represent globalism and high technology — they shrink the world and threaten cultural conservatism. The Boeing 747 was the last of the “great machines” that characterised the 20th century: it opened up air travel to the mass market.”

His argument puts the common environmentalist dislike of air travel into perspective (see August 5 dispatch). Few environmentalists would blow up aircraft but they share a similar aversion to air travel as a symbol of modernity.

Then again other symbols of modernity, such as skyscrapers and cars, are also under attack in different ways.

Labels: environment, modernity, technology, transport

Dr Sam Thompson, one of the authors of the recent New Economics Foundation (NEF) report on global happiness, has written a letter to Spiked in response to my article on happiness league tables (see August 7 dispatch). In my view his arguments are disingenuous. First, I already point out in my article that his league table in not a happiness measure. The point was that it was promoted in that way. Second, I also mention that the alternative league table is partly based on NEF data.

His letter follows below:

I am one of the authors of the New Economics Foundation’s Happy Planet Index (HPI), which Daniel Ben-Ami critiques in Who’s happiest: Denmark or Vanuatu?

I would like to clarify that our index is not a measure of happiness. Vanuatu is not the happiest, or the ‘best’, place in the world to live, and no one with any sensible understanding of the issues would try and claim that it is.

Rather, our index is an efficiency measure. To put it crudely, it measures how much wellbeing is achieved per unit of resource consumption. A country that scores well is not necessarily happy, but it is relatively ‘wellbeing efficient’ in the sense that it produces its wellbeing cheaply. Obviously, this does not imply that its absolute level of wellbeing is high per se. If you like, this can be read as an ‘environmentalist’ reformulation of the diminishing returns of wealth argument – wellbeing returns diminish significantly after a ‘footprint’ of about two global average hectares per person of resource consumption, not $10,000-$15,000 (as commonly claimed).

We did our best throughout the report to emphasise that the HPI should not be interpreted as a happiness index – we even wrote ‘It is important to recognise from the outset that the HPI is not an indicator of the happiest country on the planet’, on the first page of the report proper, and continued to emphasise this throughout. We repeatedly made the point that no country performed as well as could be expected and all could and should do better.

It’s true that some of the press coverage grabbed the wrong end of the stick. This may be partially our fault for giving the report its catchy name, and there may be a lesson there for us to learn in future. However, the majority of correspondents seem to have got the gist accurately enough.

For your information, I would also point out that the Leicester study is based on the set of life satisfaction data that we produced for our report. So we agree with them absolutely about which country is ‘happiest’ – it’s Denmark. We just disagree about how important that is, relative to other things.

Labels: economics, footprint, happiness, spiked

I read in today’s Financial Times (see below) that many Indian states are banning drinks from Coca-Cola and Pepsico. Allegedly there are unsafe levels of pesticide residue in their soft drinks. I am not in a position to make a definitive judgement but I am suspicious about this campaign. I suspect the fears are probably exaggerated and in any case a better campaign would be for India to improve its awful system of water supply (for more on this read the World Bank’s latest development policy review on India).
--------------------

Indian states join Coke and Pepsi ban
By Jo Johnson in New Delhi

A quarter of India's 28 states have announced partial or total bans on Coca-Cola and PepsiCo in the wake of fresh concerns over pesticide levels in soft drinks.
More bans are expected in the coming days in a political backlash against the US companies that has the potential to disrupt flows of US and other foreign investment to India.

Labels: corporations, india

I seem to have started a collection of examples of anti-growth thinking from around the world. In France evidently a term for it is “décroissance”. There is even a website for the school of thought. Unfortunately I cannot read French so I cannot talk about it directly.

However, I notice that Serge Latouche, an emeritus professor at the University of Paris-Sud, has written several pieces along these lines including in Le Monde Diplomatique. His January 2006 piece contained several more synonyms for growth scepticism or related ideas including downshifting, anti-productivism, requalified development and sustainable development. It defines décroissance as "the replacement of economic growth with a steady downscaling in production levels to bring human use of the planet’s resources back within sustainable limits."

Labels: economics, sustainability

I am amused by the symbolism of environmentalists calling for darkness. Evidently environmental campaigners in Hong Kong tried to get individuals and businesses to dim their lights yesterday in a protest against air pollution in the city. However, according to a BBC report the campaign failed to get mass support.

No doubt economic growth can help China clean up its problems with pollution. But the drive to get China to adopt environmentalist principles is a pernicious one. China’s development approach should be geared towards improving the lives of its people rather than maintaining some kind of harmony with nature. The environmental debate in China is a particularly important one to watch.

Labels: china, environment

President Thabo Mbeki of South Africa provides an eloquent example of growth scepticism in the Nelson Mandela Memorial Lecture (PDF) at Johannesburg’s University of Witwatersrand on July 29. Mbeki’s argument is involved but essentially it is an attack on the emphasis on economic development in the 1994 Reconstruction and Development Programme of the African National Congress. He even goes so far as to identify the acquisition of material wealth as a value embodied in white minority rule under apartheid. Instead he argues today’s South Africans should recognise the value of the biblical injunction that “man cannot live by bread alone”. In a country where massive social inequality is still evident such talk is presumably designed to lower the expectations of the impoverished majority.

Labels: Africa, development, growth, inequality

Austin Williams, the director of the Future Cities Project , has recommended Made to Break by Giles Slade to me. The book is a study of twentieth century technology seen through the prism of obsolescence. Evidently Austin has reviewed it for the Times Literary Supplement.

Labels: book, technology

My latest article on Spiked argues that global happiness league tables reveal more about the prejudices of their compilers than about the inhabitants of different countries. Its starting point is the complete contrast in different global league tables of happiness.

Meanwhile, a YouGov poll quoted in today’s Financial Times found that middle class people living in the south-west of England where the happiest in the country (“South-west comes out smiling in happiness poll”). In contrast, their counterparts in the south-east are the most miserable. Seems it is hard to move nowadays without coming across a happiness researcher.

Labels: happiness, spiked

Reading further on the work of Robert Fogel (see dispatch on July 30) I have discovered the useful concept of technophysioevolution. As I explain in the comment in the latest issue of Fund Strategy (August 7):

“The trend of improving morbidity is clear from the work of Robert Fogel, a Nobel laureate and professor of economics at the University of Chicago, and a federally funded project on ‘Early indicators of later work levels, disease and death’.

“Fogel's work shows that in an 80-year period - comparing those born in the mid-nineteenth century with those born in the early twentieth century - American life expectancy increased by 6.6 years. Over the same period the average age of the onset of common conditions such as arthritis, heart disease and respiratory problems increased by 10 years.

“Some researchers have even suggested a theory of "technophysioevolution" to explain these trends. As humans gain greater control over their environment there are rapid improvements in both mortality and morbidity.”

Also his March 2005 National Bureau of Economic Research (NBER) paper on Changes in the physiology of aging during the twentieth century looks like a useful update of his previous work. A summary can be found in the NBER Bulletin on Aging and Health .

Labels: America, economics, Fund Strategy, health, progress

The Financial Times is running a series on the trend for an every-increasing proportion of the world’s population to live in cities (for a summary click here ). Evidently some time next year the number of urban dwellers will surpass that of those living in rural areas. Sounds like something to celebrate.

Labels: cities, development

This picture probably cannot be seen that clearly but it is from the window of the Halcyon Gallery on London's New Bond Street. It depicts a Christ-like figure, drawn in the style of Caravaggio, with credit cards sticking out of his hair and Calvin Klein underpants. He also has "Coca Cola" written on his stomach. Presumably it is meant to symbolise the contemporary worship of material goods.

Labels: consumption, corporations

Changing attitudes to flying are lamented by Brendan O’Neill, the deputy editor of Spiked, in the Guardian’s comment is free. Once it was seen by some as “the epitome of breaking new worlds”. More recently it has even been portrayed as akin to child abuse because of the impact on climate change. Even mainstream commentators often see flying as somehow sinful. Another sad case of a profoundly positive development being recast as a problem.

Labels: spiked, transport

An awkward statistic for those who believe America has a free market economy. Evidently Enron – often seen as the epitome of free market capitalism – built its fortune on $7bn of government subsidies. At least according to a review in today’s Wall Street Journal Europe (Jacob Laskin “The welfare state corporate America’s in”). This article is in turn a review of The Big Ripoff by Timothy P Carney (published by Wiley).

Labels: America, book, corporations, economics

One of the things I intend to do in my book is to use economic history to show readers how much the world has benefited from growth. In that respect the work of Brad De Long , a professor of economics at the University of California at Berkeley and a former Treasury department official, is useful. His semi-daily journal outlines the key readings for his economic history courses. One of the most interesting is The Conquest of Nature, an introduction to world economic history by Greg Clark. The introduction has a graph showing global output per person stagnant until about 1800 and then rising sharply after that.

De Long also includes a references which reminds me how degraded the discussion of economic growth has become. It includes a 1987 article by Jared Diamond , an environmentalist and best-selling author, arguing that the agricultural revolution was a mistake. Apparently we were all better of as hunter-gatherers.

Labels: energy, growth, progress

A friend has sent me a link to a website which is revealing about contemporary attitudes to global inequality. The global rich list site, presumably designed for people in the wealthy West, is meant to show individuals where they are in the global income distribution. For example, an individual earning only $25,400 (£13,600) might feel poor in the West but he just about scrapes into the top 10% of earners in global terms.

The site defines its goals in the following terms:

“We wanted to do something which would help people understand, in real terms, where they stand globally. And make us realise that in fact most of us (who are able to view this web page) are in the privileged minority.

“We want people to feel rich. And give some of their “extra” money to a worthwhile charity.”

Surely a healthier reaction would be outrage that 90% of the world’s population is earning less than $25,400?

Labels: development, inequality