What is wrong, and why we can’t seem to fix it

Throughout most of my life I have been living under conservative governments, and the nicest way I can find to describe political conservatism is to say that it embodies the popular phrase ‘If it ain’t broke, don’t fix it’. However, as we all know there are many things wrong at present, and they need fixing. No amount of ignoring them will make them go away. This blog is about those awkward facts of world that won’t go away and which political conservatism won’t make go away either.

What I’m going to aim to do is post a blog once a week, on a Friday, so you can digest it over the weekend. The next week’s blog will either be the next in my series, or a discussion of issues that have arisen from the comments.

I’m going to have a very strict comments policy, comment will only be accepted if they are intelligent and polite contributions to discussion around the topic of the post. Everything else will be moderated.

If you find a blog here sympathetic, you might consider reading the blogs from the beginning, as they are supposed to be a more or less continuous argument.

Wednesday, 14 September 2011

Grumble 2: Stupidity

You would have thought that stupidity would simply be an affliction, however, our society seems to treasure it as a normal state of being. I indicated earlier in these blogs how I thought that the media, instead of informing people, by its poor provision of information actually encourages and causes ignorance to be perpetuated.

Global warming denialism is a plant whose roots can only take in rich loam of stupidity that is produced by the low standards of our media and the low standards of public debate. For example recently Tim Flannery, the Australian Chief Climate Commissioner, was quoted as saying:

If the world as a whole cut all emissions tomorrow the average temperature of the planet is not going to drop in several hundred years, perhaps as much as 1000 years, because the system is overburdened with CO2 that has to be absorbed...

Instead of reacting correctly and saying ‘oh my goodness, the amount we have already added to the atmosphere, which has locked us in to a 2°C temperature rise, will persist for 1000 years, we better take action immediately to ensure that we don’t add any more’, the great unwashed of the media and the denialist parallel universe said ‘Flannery says action on the carbon is pointless’. Face-palm.

And out education system does little to wake us out of our intellectual slumber.

Another example of reign of stupidity is the current popularity of the Australian federal opposition in opinion polls. By any criteria, even ‘conservative’ economic orthodoxy, a Tony Abbott government would be a disastrous one for Australia and would plunge the country into turmoil. The correct reaction to the shortcomings of the present government would be for voters to indicate a preference rather for the Greens and other parties. I’ve already argued that that our bipolar two party system is one of the factors that prevents us from taking necessary actions.

Even on the level of particularities stupidity is a defining trait of our society. For example a common product in supermarkets around the nation is anti-perspirant spray. Think about it, why would you want to stop yourself perspiring? Body-odour is not caused by perspiration... go and research this for yourself and find the correct solution.

Flogging this thread until its dead... you could argue that the consumerist world of late modernity was created by marketing people when they devised a whole gamut of needs that don’t really exist (like anti-perspirant, which, if it worked, would kill you). Recently I was in a department store and saw a strikingly beautiful woman, yes, you’ve guessed it, browsing in the ‘beauty products’ section. I wanted to tell her she didn’t need any of them, but that would have been too forward.

How I wanted to end this piece was to talk about two common economic myths that are trotted out constantly, one is that of ‘comparative advantage’ and its crucial role in driving modernity. Common or garden advantage is where a region can produce some good or other because its found there, or it grows there. For example Cornwall used to export tin because it was one of the few places in Europe where tin was found. Similarly cotton can only be grown in the warmer parts of the world.

Comparative advantage is not like this, comparative advantage is where a region can produce a good at a lower price because of social factors, lower wage costs, preexisting expertise and capacity &c It is the basic argument behind globalisation.

The deification of comparative advantage is based mainly on low wages in some areas of the world. This is a historical anomaly, 20,000 years ago everyone had the same standard of living, even 200 years ago, I believe I remember reading, the poorest people in the world were only 6 times worse off than the richest. And in the future you would hope that disparities in wealth begin to reduce and more or less disappear. You would hope that human ingenuity and ‘progress’ is not simply built on exploiting the poor. (‘Fair Trade not Free Trade’, as the slogan goes). If progress progresses more slowly because of this I am all for it.

What people fail to note beyond this, however, is that another part of comparative advantage is the absurd cheapness of transport. I am quite prepared to believe that high tech manufactured goods (where transport is a tiny part of the final price) should be made wherever the technical expertise lies, but when I go into a supermarket in Australia and see garlic ‘Product of Mexico’, being sold, I am filled with sorrow. This is not because I don’t like Mexican garlic [Grangeros Mejicanos, me gustan sus ajos], or don’t want Mexicans to sell their produce, but to take garlic from Mexico half-way around the world is tragic waste of resources. The cost of the fuel for the container vessel must make up 99% of the cost of the product, which could be grown almost anywhere in Australia. You would hope that a properly designed scheme to tax carbon emissions would be able to eliminate such madness from the world.

In time to come, when global transport costs are very much higher than are now people will shake their heads at the thought that we used to transport vegetables around the world just because we could, or that a sacred belief of economics was based on nothing more than historical contingencies (low wages, the low cost of transport).*

The other common myth which feeds into the myth of the greater efficiency of the private sector is that of competition.

When I was a student in an English Midland city in the 1980s there was a bus company owned by the City Council that served the city. The fares were reasonable and the service was all right without being great. The Council decided that they would sell off the bus company and so, to have competition, two rival companies took over. For a few weeks the fares remained low and the service improved, with new routes and with buses departing more frequently. After this initial period one company withdrew, fares went up, routes were withdrawn and services became less frequent. So after a brief period of competition we had a service that was more expensive, had fewer routes and less frequent buses.

This, I submit, is the story of competition at all times, a brief period when a market opens up of strong competition, followed by the normal state of affairs, either a monopoly, or a state where several companies dominate a market, prevent new entrants coming into the market, and, largely, do not compete with each other.

Next week, in my third grumble, I will carry on on the theme of the private v the public sector in popular thought.

*Chinese people shake their heads at the memory that the Emperor Xuanzong of T’ang (r. 712–56) used the imperial courier service to rush lychees north from Szechuan for his favourite concubine. They believe that the An Shi Rebellion which ended his reign, and ruined the dynasty, was a direct consequence of such extravagance.

Next Week: the preference for private enterprise

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