Nonsense, horsefeathers, and idle musings from a decade in South Korea (2002-2012).

31 August, 2010

Bootleggers & Baptists

By Aaron
31 August, 2010

One of the most powerful explanations of political decision-making is the "Bootleggers and Baptists" theory of regulation, as first proposed by Bruce Yandle back in 1983, and explained in the video above. In essence, Yandle's theory states that durable regulation results when groups with opposite moral interests work toward the same goal. The theory's name comes from the Prohibition Era of 1920s America, when the Baptists were happy to see liquor banned based upon their religious beliefs, while the bootleggers liked the laws against alchohol because they earned a healthy living selling illegal booze.

Politics, strange bedfellows, etc.

Fast-forward to the present-day and we see the same peculiar collusion between big business and, yes, left-wing environmentalist groups. As Matt Purple writes:

[In the late 1970s] Ethanol was more established overseas, particularly in Brazil which produced ethanol from sugar cane. America could import this fuel for cheaper prices than were available domestically. [Archer Daniels Midland Chairman Dwayne] Andreas knew Jimmy Carter's presidential campaign was in trouble, so he struck a deal. If Congress would slap a tariff on foreign-produced ethanol, Andreas would open a new ethanol plant in Des Moines, boosting Carter's political fortunes in the Midwest. Carter agreed and the tariff was passed.

By then, Congress had caught ethanol fever. Liberal environmentalists talked up gasohol as a step towards cleaner skies. Midwestern politicians from rural states waxed poetically about the American corn farmer. In 1980, the government passed an income tax credit for companies that produced gasohol. The credit would be increased in 1990 and again in 2004.

And so, despite the fact that corn ethanol is actually less "green" than your average gallon of gasoline, American consumers might soon be forced to use even more of it. Read Purple's article in its entirety for all the sleazy details.

Bootlegger, meet Baptist.

30 August, 2010

Prosperity Without Borders

By Aaron
30 August, 2010

In a letter to the Joong Ang Daily published today, Steven Borowiec launches a preemptive strike against a proposed free trade deal between Korea and China. Because Korea supposedly cannot compete with China's lower wages, Mr. Borowiec argues that any such agreement would harm Korea's middle class while enriching the local plutocrats. As evidence, he cites the experience of Canada and the United States with the North American Free Trade Agreement (NAFTA). Unfortunately, Borowiec is uninformed in his arguments and misguided in his recommendations.

At root, Mr. Borowiec seems to believe that trade across arbitrary political boundaries truly does impoverish people. Perhaps, then, since wages in Seoul are typically higher than those in the Jeolla provinces of southwest Korea, he would support protectionist tariffs on all imports of rice into Seoul from the Jeolla Provinces. After all, by Mr. Borowiec's logic, this would protect the jobs of rice farmers and other workers within Seoul's city limits, and make everyone more prosperous as a result. Or, taking his logic to its most absurd extreme, perhaps Mr. Borowiec would support a policy in which every family had to produce everything they used within the confines of their own home. No "importing" from "foreign" suppliers across the street. Obviously, neither of these policies would benefit anyone. In fact, we'd all be much poorer as we devoted all of our time and energy to sewing our own clothes and growing our own food. Quite simply, self-sufficiency is the road to poverty and while this reality may be less obvious at the national level, it is no less true.

As evidence in support of his suspicion of free trade, Mr. Borowiec offers NAFTA and the extent to which it has "hollowed out the American and Canadian working classes" since it took effect in 1994. Perhaps it would interest Mr. Borowiec to know that, as a percentage of U.S. employment, manufacturing has been declining steadily not since 1994 but since the 1960s, as American workers became more productive and as the economy shifted toward information-based service jobs. As Dan Griswold notes, the U.S. added a net 26 million jobs between 1994 and 2008, while the average real hourly compensation (wages and benefits) of workers climbed 23%. Not all of this is due to NAFTA, of course, but it does undercut claims that NAFTA was a dagger to the heart of the American middle class. Finally, and most importantly, overall output at U.S. factories was actually 37 percent higher in 2009 compared to 1993, according to table B-51 of the latest Economic Report to the President. Does anyone (i.e. Mr. Borowiec) think America and Canada are poorer countries today because they have a smaller percentage of their populations working in agriculture than they did 100 years ago? Of course not, so why should manufacturing be any different?

Ultimately, trade has a relatively minor effect on employment. By far the greatest influence on the number and type of jobs available in any economy is technology, and the gains in productivity it engenders. The printing press threw scores of scribes out of work; refrigeration rendered the iceman obsolete; affordable automobiles handed the proverbial pinkslip to the man responsible for keeping city streets free of horseshit. More importantly, however, each of these technologies created countless new jobs that no one had before envisioned.

And so, I only hope that in his drive to save jobs, Mr. Borowiec will not come after my iPod and force me to hire a band of minstrels.

27 August, 2010

Emergent Order

By Aaron
27 August, 2010

Nature by Numbers from Cristóbal Vila

It's a dreary, humid Saturday morning here in Seoul, South Korea. In place of my usual fussing and moaning, then, I'll simply give you the above video, which ought to cheer you up.

Caleb Brown, host of the excellent Cato Daily Podcast and from whose site I grabbed the video, astutely labeled his post of it "Emergent Order," and so I'm stealing his title. Students of evolutionary biology, language, and FA Hayek's writings on spontaneous economic orders will no doubt understand the reference and appreciate the unspoken insights of Cristobal Vila's short film. I was reminded, in watching the film, of the extent to which emergent orders - in math, science, technology, etc. - were necessary simply to allow Vila to make the film.

24 August, 2010

Bribery By Any Other Name

By Aaron
24 August, 2010

The Wall Street Journal reported this week that the Indian government has agreed to a series of wage hikes for local members of Parliament (MP), a step which some governance experts are touting as the first step toward reducing the level of corruption in government. Of course, others suspect that the MPs will simply take the higher wages and continue to accept "gratuities" on the side. Only time will tell who's correct, I suppose.

To be fair, countries with low levels of corruption, such as Singapore, often cite the high pay received by civil servants as the primary reason for their well-functioning, transparent governments. Indeed, according to Transparency International's "Corruption Perceptions Index," Singapore is one of the least-corrupt countries in the world, trailing only Denmark and New Zealand. India, for the record, is ranked 84th in the world.

"Why should we take bribes?" a Singaporean civil servant will ask. "Our salaries are already higher than anyone in the private sector."

And maybe it's true: perhaps higher salaries and better benefit packages do lessen the temptation to seek out bribes.

But so what?

Civil servants and politicians receive their salaries from the public purse, which is funded by taxpayer dollars. Thus, to pay these folks more, the government must take, by force, more money from other citizens' pockets. After all, taxes are always collected under the implicit threat of force: if you don't pay, you can be thrown in the clink and have your property confiscated. So even if we assume that higher salaries may reduce government corruption, it would only happen because citizens are being forced to, in effect, bribe civil servants and politicians to not take bribes.

Theoretically, I can imagine a scenario in which, assuming higher pay produces lower corruption, a nation would still benefit from "bribing" civil servants to behave themselves. For example, the ministry in charge of choosing contractors for public infrastructure projects might be more likely to choose the most competent, efficient contractor instead of the company willing to slide the most cash under the table, thus avoiding, say, a bridge collapse that kills hundreds of people. In this case, perhaps the citizenry would benefit by paying more taxes in order to reduce the amount of bureaucratic monkey business. Then again, this is almost a dictionary definition of extortion: pay me more money, or else watch your bridge take a swim.

Truth be told, I haven't studied corruption in any detail, and thus can't offer much aside from skepticism on this matter. What is it that makes New Zealand and Denmark less corrupt than, say, Belgium or the United States? I wish I knew.

Squat. Aim. Shoot.

By Aaron

I've now lived in Korea for more than eight years. For almost half of that time, the governments of Korea and the United States have been wrangling over the minutiae of a free trade agreement. If you're anything like me, you're probably saying to yourself, "wait a minute, free trade requires neither complex laws nor plodding bureaucracies. It simply requires that governments do, in effect, nothing. Let me buy from you, and vice versa, wherever we may be."

And you'd be correct.

As Robert Batemarco points out, managed trade is not free trade but rather "a fig leaf for protectionism." Still, an FTA between Korea and the United States would lower trade barriers between the two countries and would thus be an improvement over the current state of affairs. Hell, even U.S. President Barack Obama, who campaigned in 2008 as a skeptic of the deal, is now trying to get the KORUS FTA (as well as deals with Panama and Colombia) passed.

Unfortunately, a weak U.S. economy and routine Democratic Party politics are making ratification a tough sell. Korea, meanwhile, hasn't been sitting by the phone, waiting for the U.S. to call:

"Everybody is moving forward except for us right now," said Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce, noting that South Korea, for one, is preparing a free-trade deal with the European Union.

Trade has been a particularly contentious issue for Mr. Obama's political base. Labor unions are virulently opposed to free-trade deals, which they contend threaten American jobs.

Nervous Democrats [ic: pardon the redundancy] are wary of any divisive issues heading into a difficult midterm election.

Not only are American political and labor leaders shooting themselves and the country in the collective foot here, they seem determined to squat down and take better aim.

22 August, 2010

Video: The Seoul City Bus Explosion

By Aaron
22 August, 2010


Back on 9 August, a Seoul city bus which ran on compressed natural gas burst into flames after the CNG tank exploded. At least 17 people were injured, some severely. Indeed, according to this article, one young woman lost both her feet. A horrific accident, to be sure.

Perhaps I'm in the minority here, but I hadn't actually seen video footage of the explosion until today. Well, there it is at the top of this post - and, believe me, it's an attention-grabber.

Amazing how easy it is to be in the wrong place at the wrong time.

h/t: The Chosun Bimbo

21 August, 2010

Education: the Next (Financial) Bubble?

By Aaron
21 August, 2010

"I've called for...producing 8 million more college graduates by 2020 so we can have a higher share of graduates than any other nation on earth. In a single generation, we’ve fallen from first to twelfth in college graduation rates for young adults. That’s unacceptable, but not irreversible. We need to retake the lead."
“Reckless university enrollment has aggravated both the private education burden and youth unemployment. It’s a huge loss, not just for households but the whole country."

I've spent about 18 years of my life in school and I fear I'm not finished yet. I thus have a natural inclination to tell myself that education matters, that it's vital to my - and everyone else's - success in life. And I'm not alone: it's hard to find anyone who will admit that, perhaps, there is such a thing as too much education.

But what is "education?" Is it just sitting through four years of liberal arts gibberish and then walking away with a piece of paper? As a liberal arts graduate myself, I'll be the first to say that having that piece of paper has given me the ability to do . . . almost nothing of any value to society. Oh sure, I can now hold forth on the literature of the Third World, but what good has that done anyone? Other than Chinua Achebe, that is.

As the Financial Times points out, this is one reason why South Korea is now realizing that its high rates of education spending and university enrollment are a net drag on the nation's economy. In effect, South Korean households are going into debt in order to create a mass of unemployed youngfolk:

Over-education has become a crippling financial drain on Asia’s fourth biggest economy. South Korean families mire themselves in debt and burn more than 3 per cent of gross domestic product on night schools and crammers dedicated exclusively to passing formulaic university entrance examinations.

After all that effort, Koreans joke they have simply created Itaebaek, meaning “mostly unemployed 20-somethings”.1

Meanwhile, over in America, President Barack Obama believes that Americans are not spending enough time in the college classroom. And so, by using taxpayer dollars to make it easier to finance a college degree, the Obama administration wishes to produce an additional 8 million college grads within the next ten years. Does it matter that a large percentage of those folks will be, say, sociology graduates of Degree Mill State University? Clearly, someone in the White House needs to talk to the South Koreans, who are quickly learning that getting a college degree simply to have a college degree makes no more sense than buying a tent just to have a tent.

Education ultimately has to be viewed in the same light as any other investment of time and money. Anyone considering whether or not to enter college should thus ask themselves: could this money and time be better invested elsewhere? Imagine, for example, that you have $100,000 to invest. Let's say you can expect a 7% annual return by putting it into real estate, or a 4% return by putting it into a CD. All things being equal, which one makes more sense?

The same is true of college. As Glenn Harlan Reynolds notes, seven of the ten fastest-growing U.S. jobs in the next ten years will be those based upon on-the-job training. So, if you're going to become a plumber or a grocery store manager - both professional, well-paying jobs - why pay thousands of dollars for a degree in gender studies? Why not invest your time in getting that on-the-job training and save or invest the money - which you're now not spending on tuition - elsewhere?

Unfortunately, as George Leef writes, people - and especially politicians - can easily become too focused on meaningless national aggregates:

..."our" college graduation rate is just a statistical artifact, like "our" home ownership rate and "our" voting rate. To people imbued with a central planning mindset, such statistics betoken national success or failure. In fact, the nation isn't doing anything. Millions of individuals are deciding whether or not to go to college and complete the course of study. Students and parents make those decisions with good (but not necessarily perfect) knowledge of the student's capabilities, the costs of college, and the prospective benefits of doing so.

Why should President Obama care that South Korea or Russia have higher college graduation rates than the United States? South Korea also has a higher rate of gimchi consumption than America, but just like a generic college degree, this does not necessarily make a person more productive in life. In fact, using government (i.e. your) money to artificially funnel people into universities may well result in a destruction of resources, as those people are encouraged to invest in less productive activities than they would have chosen absent such a distortion. And Russia? Well, this wouldn't be the first time they'd caused America to panic. David Skarbek and Peter Leeson write:

Before its collapse, the Soviet Union devoted substantial resources to training scientists and engineers. Because of these expenditures, during the 1980s the Soviet Union had 10–30 percent more scientists and engineers than the United States. Occasionally, people pretend this fact illuminates the relative efficiency of these countries’ contrasting economic systems.

It does no such thing. If the United States had devoted as many resources to training scientists and engineers as the Soviet Union, it could have produced as many scientists and engineers, and perhaps many more. However, the United States allowed private citizens to determine resource allocations in a way the Soviet Union did not. Under the institution of private property, U.S. citizens used market prices to direct resources to ends they valued more than additional scientists and engineers. While the United States had fewer people trained in these professions, it was richer than the Soviet Union because markets consider alternative uses when they allocate resources. Although the Soviet Union had many more scientists and engineers, it was poorer than the United States because central planners allocated resources without considering alternative uses.

All of which is why Reynolds believes that a "bubble" in higher education may be emerging. Just as the federal government, via Fannie Mae and Freddie Mac, artificially increased home ownership and contributed to the American real estate bubble, government-driven investment in higher education can easily become excessive and yield negative returns. This problem is compounded when the state and the students go deep into debt to finance their college degrees.

No asset should be expected to appreciate in value ad infinitum. And just like those homeowners in Las Vegas, college graduates and the U.S. Treasury could easily find themselves underwater on all those college degrees.


1 For the record, the rapid aging of Korea's society, combined with low birthrates, will probably do more than any government program to resolve such unemployment problems. Not that this helps those who currently don't have a job.

18 August, 2010

The North Korean Twitter Brigade

By Aaron
18 August, 2010

Hard as it is to believe, Twitter has recently become more annoying, and Youtube more vapid, than ever before - and, for once, this doesn't involve Lindsay Lohan or LeBron James.

According to Choi Sang-hun of the International Herald Tribune, North Korea has hopped aboard the twatwagon and is now using Twitter and Youtube to do what it's always done: spew forth the nation's comic book-worthy propaganda. Those loudspeakers along the DMZ worked fine for a few decades, but why limit your message to a few bored South Korean soldiers when you can reach millions via social media sites?

In the last month, North Korea has posted a series of video clips on YouTube brimming with satire and vitriol against leaders in South Korea and the United States.

In one clip, it called Secretary of State Hillary Rodham Clinton a “minister in a skirt” and Secretary of Defense Robert M. Gates a “war maniac,” while depicting the South Korean defense minister, Kim Tae-young, as a “servile dog” that likes to be patted by “its American master.”

But, hey, who cares? Let North Korea have their vitriolic little corner of cyberspace and post a few of their doddering videos on Youtube. Right?

Well, the South Korean government apparently gives a damn and, as Robert Koehler notes on The Marmot's Hole, has decided to handle this situation in "the most ham-fisted way possible." Since the bureaucrats in Seoul can't stop the North Koreans from using the web, South Korea's Unification Ministry is warning South Korean citizens that they could be prosecuted for, say, commenting on the North's videos or tweets - because, you know, South Korea is a liberal democracy which treats its citizens as adults and has no reason to fear an open marketplace of ideas.

The irony, of course, is that Google (which owns Youtube) disabled all comments and uploads on its videos from South Korea in 2009 in response to a local law which required users to submit their real names and government ID numbers when contributing to the site. But while Youtube might be off-limits, South Koreans could still find themselves in hot water via Twitter.

So, here's what we have: North Korea, arguably the most repressive state in the world, has moved onto the internet, where speech is as free as it gets. Meanwhile, South Korea - one of the most wired countries on earth - is monitoring its citizens' online activity and threatening to prosecute them for using Twitter (even if only to ridicule the North's nonsense).

Makes perfect sense to me.

17 August, 2010

Evil, or Just Wrong?

By Aaron
17 August, 2010

On 22 May, 1856, Representative Preston Brooks of South Carolina strode onto the Senate floor in the United States Capital building and, with his wooden cane, beat Senator Charles Sumner of Massachusetts to within an inch of his life. Apparently, in Brooks' mind at least, Sumner had spoken ill of one of Brooks' relatives (Senator Andrew Butler) in a speech and Brooks felt bound to defend his family's honor. Due to his injuries, Sumner would not return to the Senate for three years.

By comparison, the discussions of political and economic issues that take place these days are actually quite civil. Still, full-bore, knock-down brawls are something of a tradition in the South Korean National Assembly, and in the United States people of all political persuasions routinely accuse one another of being the second coming of Hitler or Stalin.

Of course, the reason that men like Hitler and Stalin are so iconically evil is precisely because there are so few people of such a vile nature. As Penn Jillette says in the video above (full version here), "if you take the six billion people on the planet and round off the numbers about six billion are good."

Somehow, though, in discussions that involve, especially, politics and economics, we are often incapable of believing that a goodhearted person could possibly disagree with our opinions. So, rather than simply believing that someone with a contrary view is wrong, we often paint them as evil, as dedicated to some nefarious goal. In truth, however, most people, regardless of their political persuasion, want the same things for mankind: safety, happiness, prosperity, health, etc. The disagreement, therefore, is not about the ends, but rather the means - that is, how do we get "there" from "here?"

It's amazing, actually, how quickly the temperature of political debate can fall when all sides acknowledge that they're driving at the same goal. Well, things cool off for a few minutes, anyway. Then they just go back to calling one another Hitler and beating each other with their canes.

15 August, 2010

Rodrik on the Myth of Authoritarian Growth

By Aaron
15 August, 2010

Thomas Friedman may have fantasies about the United States being "China for a day," and Woody Allen may wish that Barack Obama "could be dictator for a few years because he could do a lot of good things quickly," but fortunately Dani Rodrik has no such illusions about the reality of authoritatrian political systems.

In a piece published last week, Rodrik, a professor of economics at Harvard, rightly points out that, in addition to the obvious human rights abuses which characterize such systems, there is no evidence that dictators provide better economic growth than democrats over the long haul:

When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo.

Democracies not only out-perform dictatorships when it comes to long-term economic growth, but also outdo them in several other important respects. They provide much greater economic stability, measured by the ups and downs of the business cycle. They are better at adjusting to external economic shocks (such as terms-of-trade declines or sudden stops in capital inflows). They generate more investment in human capital – health and education. And they produce more equitable societies.

As I've written before, the individuals who become politicians and staff the civil service are not superhumans, nor do they undergo some profound moral or intellectual transformation when they enter public office. The best (i.e. most productive) political-economic system is one in which those with the most knowledge of any given situation also have the ability and incentive to act upon that knowledge. Authoritarian systems, however, separate knowledge and power. The rulers of such systems are nothing more than imperfect humans who have expansive power but lack the knowledge necessary to make the best (i.e. most productive) decisions on a consistent basis. There is thus no compelling reason why an authoritarian government should be expected to make better political decisions than would be made under a democracy.

The growth of China, to take the favorite example of dictator cheerleaders, only began when the political leaders loosened their grip on the economy and acknowledged, if only to a limited extent, that perhaps individual citizens are better positioned than the state to order their own affairs. The question, then, is: has China's economy grown because of, or in spite of, the authoritarian political structure that still exists? The same question, in fact, should be asked about South Korea's rapid economic growth between the 1960s and 1980s.

The answers to such questions, if indeed they can be found, might just interest Messrs. Friedman and Allen.

14 August, 2010


By Aaron
14 August, 2010

Having wrapped up his paean to the common man, Korean President Lee Myung-bak took a break from entertaining despots this past week and got back to business by granting special pardons to 2,492 convicts, among them political slush fund operators and businessmen convicted of corruption. The Blue house is spinning the pardons, a traditional gesture to mark Korea's 15 August Liberation Day holiday, as a way to heal political divisions. In addition, Lee said that he hopes that the pardoned businessmen will make themselves useful and create a job or two.

Ah, yes: job creation. These pardons of felonious businessmen are almost always sold as a way to kickstart the economy and improve Korea's competitiveness. Moral hazard be damned, goes this logic, Korea needs these fellows back out there in the economy.

But guess what? Korea doesn't need fellows like Lee Hak-soo, who played a key role in orchestrating the corruption at Samsung. Nor, does Korea need Chung Mong-koo of Hyundai Motors, or Lee Kun-hee of Samsung, or Kim Seung-yeon of Hanwha - at least, not any more than America needs Dennis Kozlowski or Bernard Ebbers. These guys, smart and ambitious businessmen though they may be, are not the fuel that powers a nation's economic engine.

Whatever prosperity Korea has achieved has been based upon the hard work and innovation of millions of people, operating within a sound legal framework. Corruption and rent-seeking behavior may be profitable for the companies and individuals involved, but they result in a net loss of value to the Korean economy as a whole. Furthermore, if the Lees, Chungs and Kims of the corporate world suddenly disappeared, other talented Korean entrepreneurs would emerge to take their place. Unfortunately, the latest pardons merely subvert the rule of law and hint that bribery and political influence - rather than creativity and elbow grease - are the surest paths to success in Korea.

11 August, 2010

Privacy and the Police Raid on Google Korea

By Aaron
11 August, 2010

For a company which informally operates under the motto "Don't be Evil," Google has sure supplanted Microsoft as the corporate devil du jour with a quickness. As the company seeks to become the alpha and omega of internet activity, many people are worried about how Google will handle the mountains of user data it accumulates. Can those new princes of darkness, Larry Page and Sergey Brin, be trusted with all this information?

The Korean police aren't so sure.

Yesterday, the police raided the offices of Google Korea on suspicion of "privacy violations" in relation to Google's Street View. The local constabulary believes that Google may have snatched user information unlawfully from wireless networks and, as such, the coppers walked out of the Google offices with hard drives and documents. I don't claim to know much about the law or technology in this area, but on the surface I can see why some might be concerned.

So long as we're talking privacy here, though, let's not forget that an internet user in Korea can barely click his mouse without being required to enter a national ID number. Want to buy movie tickets on the theater website? Buy an iPod online? Make airline reservations on the web? Each of these, as well as many other online actions, will require you to enter your resident ID number. If you're concerned about Google accumulating private information, you might also consider that the South Korean government could conceivably monitor most of of your online life if it so desired.

For some reason, though, people are less alarmed when the state asks for - or just takes - sensitive information. Yet, there's no obvious or inherent reason why the government would use such data in a more responsible, moral manner than would a company like Google. Both entities are run and staffed by human beings, subject to the same impulses and weaknesses (greed, spite, prurient curiousity, etc.) that could prompt someone to use private data for less than noble purposes.

Google, then, may not be the only cause for concern.

10 August, 2010

How to Spot a Jap

By Aaron
10 August, 2010

This afternoon, I came across this link in my "to-be-blogged" list, where it's evidently been moldering for a few years now. Many of you will thus have already seen it, but it's worth posting for those of you who haven't yet laid eyes on it.

What we have here is a 1942 US Army/Navy manual entitled "How to Spot a Jap" - and more specifically, how to distinguish between someone from Japan (an enemy during those World War II years) and a person from China (an ally). The illustrations, incidentally, were done by Milton Caniff, a well-known American cartoonist at the time. If it's possible for something to straddle the fence that divides cringe-inducement and hilarity, this pamphlet does it. A quote from the book:

[The Chinese] usually has evenly set choppers. [The Jap] has buck teeth...[the Chinese] smiles easily. [The Jap] usually expects to be shot...and is very unhappy about the whole thing.

Does this show that the United States has made some progress on the matter of race? Maybe just a bit.

09 August, 2010

On Evolutionary Psychology and the Extended Order

By Aaron
09 August, 2010

A friend recently posted the following joke on Facebook:

How many free market economists do you need to change a lightbulb? None. If the lightbulb needed changing, the market would have done it already.

Now, I don't care to debate economic philosophies today, but this joke - in tandem with the must-watch video above from (extended version here) - has reminded me of just how ill-equipped by evolution is the human brain when it comes to understanding the complexity of our modern world.

Most of human evolution took place under conditions in which humans lived in small bands of hunter-gatherers, which were guided in their actions by concrete, indisputable aims: get food, stay warm, run like hell. Moreover, in these prehistoric times, other humans were either friends or family (members of the same group), or enemies (everyone else). There wasn't much in between. Thus, to achieve anything, one had to act altruistically toward, and in solidarity with, one's allies. Everyone else got an ass-whuppin' if they strayed into the wrong weedpatch, as it were. Over time, the processes of natural selection favored those individuals who possessed such instincts and here we are today: still tribal and suspicious of outsiders.

Moreover, the human mind is not well-bred to easily grasp complex chains of cause and effect. In the prehistoric past, humans didn't have much power over the world around them and thus weren't normally capable of setting off such sequences of events. Rather, most human actions elicited an immediate and obvious reaction: chase the gazelle, get lunch; poke the lion in the ass, be lunch. Public policy, such as it was, amounted to deciding who would hunt (the men) and who would rear the offspring (the women). That life could be any more complicated than this would have been unimaginable to our prehistoric ancestors.

Even in the 21st century, the human instinct is to apply the rules that govern our family life to the wider world. In my home, for instance, the dishes don't get washed and the laundry doesn't get folded unless I do it - or, if the stars are aligned just right, I manage to convince my wife to do it. This is the simple cause-and-effect to which our brains are accustomed: the plates are dirty, I wash them, now they're clean. This is also the idea that seems to come through in the joke above.

When shifted to the outside world, however, this mindset generally proves to be a disaster, as when a government official decides that, say, no pencils could possibly be made unless he orders their production - the sort of thinking that has spawned such masterful catastrophes as the Soviet Union and Cuba. Yet, somehow, even with a growing population of schoolkids, and despite the fact that no pencil czar commands their production, we never seem to have a shortage of pencils. Unfortunately, the human mind struggles to understand that anything could be accomplished or produced unless it is actively commanded from on high, as the tribal chief would have done back when we were all still roaming the savannah, crapping in the underbrush, and wondering when the rain god would order some precipitation.

"If you have a problem, and you intend to solve it, you think about something to solve it and you do that," says John Tooby in the Reason video. "And that works when you understand the situation, you understand your house, you understand a little something about your business. But there's no way we can understand a world in which there are millions of players doing an immense number of different things which are beyond our comprehension."

Somehow, though, in yet another twist in the natural selection saga, we have come to live in a world in which prosperity depends on cooperating with people we don't know - and will never meet - as well as on learning to anticipate not only what is seen, but what is unseen. Success in this modern world thus requires that we go against our instincts and learn to live by two separate sets of rules: one within our families, and one for the "outside world." And, as F.A. Hayek wrote in The Fatal Conceit, woe unto he who be mixin' the two:

If we were to apply the unmodified, uncurbed, rules of [the small band or family] to the [wider civilization], as our instincts and sentimental yearnings would often make us wish to do, we would destroy it. Yet, if were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once.

The point - and I know you were beginning to doubt that I had one - is that we're not wired to see through the complexity of our modern civilization and, as such, we often do a lousy job in running even our own individual lives. With that in mind, we ought to exercise the greatest humility - and restraint - when we get the urge to order someone else's affairs, especially when that person is outside of our immediate family. Fact is, we usually don't know as much as we think we do.

04 August, 2010

Korea: Electrified

By Aaron
04 August, 2010

Goodness, I love air conditioning, and never have I appreciated it more than this summer. This time of year is always nasty in Korea, but 2010 has been especially hot and humid. The August temperatures started in June; the usual July monsoons, which are unpleasant but at least cool a man off, never arrived; and now, we're into August and facing at least six more weeks of this blasted nonsense. Fortunately, I have an air conditioner, as do many other folks in Korea.

Trouble is, Korea's running short on electricity these days. Or rather, there's plenty of electricity, but people in these parts rarely worry about conserving it. Not that this should surprise anyone, as electricity is, in effect, subsidized by the government.

While I don't have the exact numbers on hand at the moment, let's just say that, at present, the average cost of bringing one kilowatt hour of electricity to the market is about 100 Korean won (KRW). The government, however, fearing a political backlash if consumer prices rise too much, has capped the retail price of electricity at about 80 KRW per kilowatt hour. The government then pays a subsidy to the Korea Electrical Power Company (KEPCO) to help them offset this loss. As a result, as the Joong Ang Daily points out today, Korea now trails only Canada - which has ample hydro and nuclear power - for the cheapest electricity in the OECD.

Of course, the only money the government has in its pocket comes from taxpayer dollars, so this cheap electricity isn't quite the bargain it appears. Moreover, in a time when everyone is fretting about a looming environmental collapse, such an irrational pricing scheme for energy merely encourages waste. In fact, it's not uncommon to visit a Korean apartment on a spicy summer day and find the residents bundled up in jeans and sweatshirts as the AC pounds away in the corner. In the winter, the same folks crank up the gas heat and sweat through the January days in their skivvies. Is it any wonder, though, that when the price of a resource is kept artificially below market rates, people "squander" that resource?

Speaking of which, I'd better go put on my jacket.

03 August, 2010

North Korean National Soccer Team Coach Sentenced to Hard Labor

By Aaron
03 August, 2010

Back in 2003, Don Yaeger of Sports Illustrated described the torture endured by the Iraqi national soccer team after the players failed to meet the expectations of Saddam Hussein's son, Uday. Not, of course, that Uday Hussein knew much about what it takes to be a successful athlete. He was simply the most heinous version of that loud jackass who sits in the stands and fancies himself an expert on everything that happens on the field. Uday, however, was a loud jackass who had a torture chamber at his disposal and no constraints on his brutality.

Fast forward a few years and, once again, we have a despotic little government - in this case North Korea - menacing its national footballers for shaming the motherland on the world stage. According to the Chosun Ilbo, the North Korean national soccer team was subjected to a lengthy verbal spanking following their, shall we say, modest performance in South Africa.

And now, lest it be accused of coddling the ruling class, the North Korean government has stripped national team coach, Kim Jong-hun, of his Workers Party membership and sentenced him to 14 hours of hard labor for "betraying the trust of [heir to the throne] Kim Jong-un."

And why not? Any government which knows exactly what its citizens should think, do, and be would surely know the secret to defeating football powerhouses such as Portugal and Brazil.