Smile When You Say Free Trade

It has come to my ears that some Earthsharing readers might be a wee bit skeptical about the efficacy and decency of Free Trade. Seriously? No, it’s true, “free trade” is a dicey thing to advocate these days. Many have said that the most eloquent defense of it ever written was Henry George’s 1886 book Protection or Free Trade (which was read in its entirety into the Congressional Record). Yet George couldn’t finish that book without informing his readers that as good as free trade is, it can do nothing, not a darned thing, to arrest the deepening of poverty as technological progress advances.

In this age of economic globalization, “Free Trade” policies tend to encourage investment in the lowest wage, least regulated places, ensuring a worldwide lowering of health, safety and environmental standards — and widening the already huge gap between rich and poor. This is the theme that was shouted by the anti-WTO “Battlers in Seattle” in 2007 — and was wildly cheered in 2016 by thousands of Donald Trump fans.

Perhaps, in a simpler time, comparative advantage was a natural law and trade was a simple matter of “three bushels of widgets for two crates of gadgets.” But now? People say: “We resist the threat of transnational corporations, instant communications and global pollution! Does that make us Protectionist? Guilty as charged!”

And people say: “Free Trade makes the rich richer and the poor poorer.” You might have to concede that one: it’s (almost) perfectly true. The strictly correct statement would be: “Under current conditions, the elimination of trade barriers will have the ultimate effect of lowering wages and benefiting monopolists.” Free trade makes labor more productive and increases national output. Historically, whenever that has happened, it’s led to “an immense wedge… forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.” In this respect, free trade is no different from any of the processes that make labor more productive. If you are against free trade for this reason, then you should also oppose technology, public education and utilities, for their long-term economic effects are similar.

People say: “Free Trade wrecks the environment.” Producers try their best to “externalize” the costs of unsafe or environmentally degrading practices. Taxes and regulations can “internalize” these costs, making it more expensive to produce certain goods. Transnational corporations have become adept at “offshoring” those parts of their operations. If “free trade” actually makes it harder for countries to enact pollution controls, then we can make a case for the policies now passing as “free trade” helping to wreck the environment.

But is that really free trade? Undoubtedly, pollution imposes costs on someone — usually on an entire region, and often, these days, on the whole planet. To flee such liabilities, gunk-spewers seek to relocate to low-regulation countries. If producers can use this state of affairs to avoid paying the cost of the pollution they create, then who does pay it? Why, nobody but us air-breathers and water-drinkers. That’s not free trade; it’s protectionism — for polluters.

People say: “Free trade contributes to an overemphasis on destructive, monoculture cash-crop farming.” A superficial free trade argument would contend that if, say, coffee is the highest-priced product that a country can sell, then coffee is what it ought to grow, and if that means mere-survival wages for its coffee-pickers, well — things are tough all over. But the real question is, who decides what to grow and sell? Peasants with land of their own could grow varied crops for subsistence, or for trading in their local economy — or they could grow coffee for export. Given a choice, they would choose to grow what benefits them the most. But if they do not control the land, then they don’t have a choice. (It is also true that in many cases the profitability of these export crops is enhanced by subsidies afforded to the large planters: yet another form of protectionism.)

People say: “Free trade brings on uglification and westernization, steamrolling local cultures, destroying diversity.” But we must ask: is it free trade that does that, or the underlying economic distortions that funnel the benefits of trade into the hands of a few monopolists? Where wages are already very low, what chance is there for local, earth-friendly firms to compete with multinational badguys?

If the private sector cannot protect diversity — both biological and cultural — in the face of business pressures, then people look to government to do so. But governments everywhere are hard-pressed to generate revenue without destroying their tax bases — and this is especially true in developing nations. Talk about your race to the bottom! None of these underlying problems can be attributed to free trade. They are endemic to an economy in which abundant workers compete for scarce opportunities, forcing wages down across the board.

People say: “Free Trade compromises national sovereignty.” This complaint is usually made in connection with safety and environmental regulations. Nations that desperately need investment and jobs are disinclined to provide adequate safety and environmental protection.

We must ask ourselves what national sovereignty really means. The first, biggest aspect of sovereignty is a nation’s control over its territory: its land. Yet virtually every nation in the world allows private individuals or corporations to own land! Not only that, various “trade” agreements place restrictions on how a nation can tax or otherwise regulate its sovereign land. A thief is a thief — whether he enjoys the stolen goods right next door, or across the sea. If a nation allows private interests to make off with profits gained from owning its land, hasn’t it already yielded the greater part of its sovereignty?

Secretary of Commerce Wilbur Ross says, “Gosh! The tariffs only add point six cents to the cost of each of 7.X gasquillion cans…”

And finally, people say: “JOBS!” Here, anti-free traders really join forces with Luddites and flat-earthers. Over the years there have been a great many productivity enhancements, technological and social (what economists would call “improvements in physical and human capital”). Workers became as productive in eight-hour days as they once were in twelve. They managed to crank out widgets just as profitably even though their employers had to shell out to meet OSHA rules. Mexican peasants learned to make as round a tire as Union Members in Akron. What happened? It’s no great surprise. President Trump longs (and falsely promises) to bring back the halcyon “Great America” days of the 1950s. But what really happened is that the huge gains made by American workers between WWII and about 1973 were shown to be the exception, not the rule. Since the late 70s, wages in the US have fallen into step with the prevailing historical trend.

In the final analysis, defenders of free trade shouldn’t be ashamed — but neither should they make too much of it. In general, international trade confers social and economic benefits — just as do education, technology, efficient transportation and communication. But we must look elsewhere for the root causes of — and the solutions to — deepening poverty, and ecological crisis.

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Value Capture: I’m Lovin’ It

No — we’re good.

Economic news sometimes manages to tickle the heel of our crazily careening Trumped-up news cycle. Recently, the issue of “value capture” has been able to tickle the heel of the economic news. That’s right, people; it’s that big a deal. This is a bit frustrating to those of us who think this is a vital issue. After all, it has to do with some of society’s most important themes: how the community manages to fund infrastructure and public goods – and generally the relationship between individuals and society itself. But, I can’t expect you to agree with me about how important this is until we unpack it a bit. So let’s try and do that.

The basic idea of “value capture” is pretty well understood. People who are willing to actually consider it find it hard to disagree with. (If you’d like a quick introduction, here’s an informative three-minute video.) The notion is that public investment, such as in, say, a new commuter rail station, disproportionately benefits the owners of nearby real estate. We all know this: “Close to transportation” is a standard selling point in ads for New York City rentals. Nearby public transportation is a convenient amenity for which people are willing to pay. The value that’s there to be “captured” attaches to the land – the locations whose proximity to the amenity makes them worth more in the market.

976 6th Avenue — one block from 34th St., Herald Square
809 6th Avenue — one block from either 28th St, 7th Ave, or 28th St, Broadway
18 East 42nd St. — one block from either Grand Central or 5th Ave. Bryant Park
26 East 23rd St. — one block from either 23rd St., Broadway or 23rd St., Park Ave.
38 Union Square West
490 8th Ave. — one block from Madison Square Garden & Penn Station

New York Governor Andrew Cuomo, having noticed that the New York City subway is struggling for funding and falling into disrepair, and that the newly completed Second Avenue subway extension has created big piles of real estate value on the Upper East Side of Manhattan, has proposed a value capture scheme to help fund the subway. A study by NYU economists Giancarlo Falcocchio and Constantine Kontokosta found that in Manhattan’s main business corridors, south of 60th St., being close to the subway adds $3.85 per square foot to the value of commercial real estate.

A few keen-eyed students of economics have even managed to excavate the theme of value capture from the 55-page infrastructure plan issued by the Trump administration. President Trump is known to be no fan of public transit, and some commentators are even going as far as to say that this is the only good idea in the infrastructure plan. Under the proposal, “any city that wants federal money must show that it will collect some of the property value gains that accrue to plots along the new [public transit] line, and use

those proceeds to finance the project.”

We would not want you to think, however, that value capture is a new idea. Indeed, though it may just be dawning on municipal governments, corporations and other big-time real estate operators have been familiar with this idea for a long time. Examples abound; to give you an idea of just how pervasively entrenched this practice is in our modern economy, here is the most easily-findable example I could think of.

It’s been widely reported that real estate is the McDonald’s Corporation’s main source of profit; flipping burgers is just how its employees busy themselves while the company waits for prime locations to “ripen.” No doubt you can think of examples of this practice in your local community. But, time is money, so I did it easy way: asked the McDonald’s website to list locations in midtown Manhattan, and checked them out on Google Maps.

429 7th Ave. — around the corner from Madison Square Garden & Penn Station

Keep in mind that there are many other companies, and individuals, who engage in this sort of economic opportunism. Moreover, these are just the first few examples from the find-a-restaurant page on their website – and they don’t even include my very favorite example of this sort of thing!

It’s also worth keeping in mind that it’s not just train stations that create capture-able value. The fact is that any public amenity or improvement (assuming it was worth building in the first place) adds to the real estate value that is “captured” by private owners of real estate. And in the final analysis, it may be that “capture” isn’t quite the right verb for for us to use in this case. It makes the value sound like some wary little animal that’s going to scamper off if we don’t act quickly. But that’s not really the case. After all, the value of public improvements attaches to land, and we know where the land is – especially in this day and age, when one can find so many excellent examples of private, corporate “value capture” in 15 minutes, using free online tools.

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The Gilded Age: Then and Now

Earthsharing readers will want to tune in to PBS’s American Experience on February 6th for a new documentary on the Gilded Age. This trailer will whet your appetite: it describes the period of the last three decades of the 19th century as “an age of possibilities,” “an age of extreme wealth,” and simultaneously — like today — “an age of extreme poverty.

The term Gilded Age comes from th    e 1873 novel The Gilded Age: A Tale of Today by Mark Twain. (The book was cowritten by Charles Dudley Warner; it was the only one of Mark Twain’s books to have a co-author, which probably explains why it was his least-popular book.) It’s revealing that the term is “Gilded” rather than “Golden” – implying a surface prettying-up, a patina applied over a much grittier underlying reality.

Just this week, we heard Donald Trump brag about the strong economy over which he is presiding, the GDP growth, the record-setting stock market. President Rutherford B. Hayes offered a similar message in his 1877 State of the Union speech:

There has been a general reestablishment of order and of the orderly administration of justice. Instances of remaining lawlessness have become of rare occurrence; political turmoil and turbulence have disappeared; useful industries have been resumed; public credit in the Southern States has been greatly strengthened, and the encouraging benefits of a revival of commerce between the sections of the country lately embroiled in civil war are fully enjoyed.

In those days, America was being made great again following the withdrawal of federal troops from the defeated states of the South, ending the reconstruction period, and ushering in that Renaissance of American race relations that came to be known as the Jim Crow era.

The big question in my mind, though, is whether this “Gilded Age” program is just about the past, or about what’s happening now. One of the things, after all, that swept Donald Trump so unexpectedly into office is the growing number of Americans who feel left behind, who are finding it harder and harder to make ends meet every month, and whose wages have not kept pace with the stock market and productivity growth. Over the last few decades many people have been talking about a new “Gilded Age.” Indeed, the immigration issue amounts to another side of the same question: many people fear that their standard of living is threatened by competition from workers in other countries – or willing to come here – who’ll work for less.

Many commentators, pointing to many charts like this one, note that the huge trend starting in the mid-1970s: for wages to diverge from overall rates of productivity. You’ll note that this chart shows both lines rising together before that – wages, in other words, increasing along with productivity, like they ought to. The clear implication here is that wage increases are supposed to track productivity increases, and that “something happened in 1970s” to disrupt that healthy trend.

The real truth of the matter, though, is that the long-term trend much more akin to the right side, post-1970s, part of the chart. Actually, something happened in the late 1940s: a confluence of new deal programs, the G.I. Bill, the rise of labor union membership and post-war prosperity in general. Prior to 1940, the long-term trend looked just like the left-hand side of our chart. In fact, just what the great American political economist Henry George described in his 1879 bestseller Progress and Poverty: “It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.” George also wrote in that book, “The association of progress with poverty is the great enigma of our times.” Clearly, the tendency for productivity to increase while wages get pressed downward is the long-term historical trend, not simply the result of “something that happened in 1970s.”

The PBS documentary devotes at least ten minutes to Henry George, who was one of the seminal voices of the Gilded Age. Progress and Poverty became an international bestseller largely because George, who had experienced extreme poverty in his own life, wrote with deep feeling and empathy about the abject suffering that seemed inextricably tied to economic progress. This made him an influential voice, and even led the combined labor parties to draft him to run for mayor of New York City in 1886 – and he nearly won, beating Theodore Roosevelt, only losing, some say, because the Tammany Hall candidate, Abram S. Hewitt, got illegal help.

There is even a separate trailer about this segment of the film, which elevates George to the level of fame enjoyed by Andrew Carnegie and J. P. Morgan. Unfortunately, though, filmmaker Sarah Colt emphasizes Henry George’s biography — his hardscrabble early years and his dramatic mayoral race — at the expense of his analysis. Viewers of this documentary will see the problem of deepening poverty along with material progress as a matter of society’s inevitable power dynamic between Haves and Have-nots — a state of affairs that Henry George poetically described, but for which he offered no workable remedy.

Henry George would’ve hastened to point out that the income-gap chart above only represents half the story, and not the more interesting half. Over time, the income gap leads inexorably to the wealth gap – which is far, far greater. “Wealth,” in this context, refers to assets can be piled up, stored, bequeathed and collateralized – not just to widgets made by widget-factories and sold in widget stores. Millions and millions of middle-class Americans live from paycheck to paycheck, storing up no “wealth.” Indeed, a big part of their income goes to paying interest on the consumer debt that they’ve piled up as they tried to keep pace with the lifestyle that their declining wages can no longer support.

The biggest point of Progress and Poverty and Henry George’s other books was that there is one asset, one form of “wealth,” whose importance outweighs every other kind. He stressed the point, which many had made before him, that no person can live, work or produce anything at all without access to land: the surface of the earth and all of the natural resources it contains. As technology and productivity improve, the value of land – which nobody is making any more of – can do nothing but increase. As social progress increases, the total of resources that we now call “natural capital” can do nothing but become more important in every way: environmentally, politically and – especially – financially. Yet the “natural capital” is owned by private individuals and corporations. Hence the new “Gilded Age.”

This point, by the way, was not lost on Mark Twain. The Gilded Age, in 1873, was all about land speculation. The quest to get rich from simply owning a piece of well-placed ground is the backbone of the book’s plot. Twain went further, though. He was acquainted with George in San Francisco, where Progress and Poverty was written. Twain was quoted as saying, “The earth belongs to the people. I believe in the gospel of the single tax.” The pointedly Georgist article “Archimedes” appeared in Henry George’s newspaper The Standard under the byline “Twark Main,” and Twain scholars have endorsed it as Mark Twain’s work.

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Getting It Together in Bangladesh

Bangladesh has been in the news lately, mainly because of the Rohingya refugees that have been pouring into it from Myanmar – close to a million of them. We can be pretty sure that the treatment of the Rohingya in Myanmar has been very, very bad– if for no other reason than the fact of where they’ve been going — Bangladesh has nothing even close to sumptuous accommodations for them.

I had been wondering about conditions in Bangladesh, because of its geographic status as a place certain to get hit very hard indeed by the many forces of climate change. It is low-lying, full of rivers and deltas which are being massively swelled by accelerating glacier melt from the Himalayas. Additionally, India diverts large amounts of water to irrigation during growing seasons — and then releases it Bangladesh’s way during rainy ones, exacerbating flooding. If you can think of any one nation that would be getting slammed by climate change, Bangladesh would be the one.

And yet, a bit of cursory Googling reveals heartening surprises about how things are going these days in Bangladesh. Despite the many geographic, demographic and geopolitical challenges this nation faces, in a number of key measures, it is doing much better than nations that seem to face far fewer challenges. Bangladesh’s economy grew by 7.1% in 2016, and it grew by at least 6% for each of the previous six years. It’s middle class is expanding much more quickly than comparable developing nations – it is said to be closing in on the “middle range” societies, those that are developing an appreciably influential middle class. Life expectancies and infant-mortality numbers have improved significantly. It cannot be doubted that there’s some good stuff going on in Bangladesh.

A Scientific American article about the horrific effects of climate change in Bangladesh nevertheless offered these facts:

Fazle Karim Chowdhury, a Member of Parliament, who explained, with a measure of pride, “once there was a shortage of food, now we export food.” Bangladesh once led the world in child mortality. No longer. Due to better health care, life expectancy rose by 10 years, from 59 to 69 between 1990 and 2010. Providing free birth control empowered women and reduced the fertility rate from seven children per woman to three, which is substantially lowering population growth rates. Universal primary education is helping to create a more skilled workforce. Perhaps most impressive, the poverty rate declined from 57 percent to 25 percent between 1990 and 2014.

A widely-publicized terror attack 2016 hit the popular Holey Artisan Bakery in the capital city of Dhaka – and some suicide bombings followed. However, these had been the first Islamist terror attacks in Bangladesh since before 2005. On balance, Bangladesh has seen very little terrorist activity. ISIS has declared a desire to open up some form of Islamic state front in Bangladesh, due to its strategic location – but, there seems to be little indication that such efforts are gaining traction.

The big news: the Rohingya

As has been widely reported, the Rohingya Muslims of Myanmar have been fleeing unspeakably horrible conditions of ethnic cleansing, and the vast majority of them have gone to the closest place they could reach, across the border from Myanmar’s Rakhine State, to the Cox’s Bazaar region in Bangladesh. Nearly 1,000,000 of them have settled in makeshift refugee camps in Cox’s Bazaar. Seven other Muslim countries have absorbed about 750,000 Rohingya refugees. Ill-equipped Bangladesh has borne the greatest burden, by far. A group of NGOs and foundations have announced a goal to raise $434 million to aid the Rohingya; it’s not yet clear how much of that will be delivered.

There are some indications that this massive influx of suffering and needy refugees has engendered some political controversy in Bangladesh. There are some reports of “increased authoritarian tendencies,” but in general, the political upshot of this seems to be rather slight. Indications are that Bangladesh is simply doing its best to make do in a difficult situation, providing what meager sanitation, water and food supplies they can in the gigantic Cox’s Bazaar refugee camps. Though it may seem callous to say so, one gets the impression that Bangladesh’s Rohingya situation is just one more thing on the list of difficult challenges that the country is dealing with. Last fall, a proposal was floated in the parliament to relocate a couple of hundred thousand of the Rohingya to a small, entirely inadequate and indeed sinking island in the Bay of Bengal – but fortunately the proposal seems to have been shelved.

Dhaka: the megacity’s megacity

Bangladesh’s capital city, Dhaka, is by all accounts an astoundingly busy place. Its current population is estimated at 18 million, and it is growing by some 400,000 people every year. It is the world’s fastest-growing city. The incentives for such explosive growth aren’t hard to identify: things like the stresses to the countryside caused by sea-level rise, severe cyclones and those melting Himalayan glaciers. And, as chaotic as the capital city might seem, it promises attractive economic opportunities, compared to the profound stresses faced by subsistence farmers (despite the fact that Bangladesh’s delta-enriched soils have traditionally been some of the most fertile in the entire world). There are old sections of Dhaka that boast architectural treasures, but, of course, huge tracts of the city now amount to little more than shantytowns, informal settlements such as are seen in any number of developing-country megacities. Yet one gets the distinct impression that in Dhaka, all of these processes are intensified – not just those that lead to chaos, but also those that lead to prosperity. Of course, like most of Bangladesh, Dhaka is quite close to sea level. Surrounded by great rivers whose flows have become increasingly unpredictable in recent years, Dhaka is estimated to be the worst-situated urban area in the world. Flooding is endemic. Local transportation is often provided by rickshaw drivers, who can frequently be seen pedaling through streets with two feet of water in them. These guys have to have the strongest quadriceps in all of Asia!

And yet, somehow, most of those hordes of people pouring into Dhaka are managing to make a living. Dhaka is by no means a wealthy city; average family income there is currently about $170 per month – but that is up. A recent World Bank report showed that income for the poorest 40% of Bangladeshis grew by half a percentage point during that period during the last six years of strong growth; in India, that trend was precisely the reverse. Yale economist Ahmed Mushfiq, quoted in Quartz Media, said, “Bangladesh’s recent success can be attributed to two major factors: the flourishing garment manufacturing industry and the country’s robust NGO sector.”

What we mostly recall in the West about the Bangladeshi garment industry is the horrible 2013 collapse of the eight-story Rana Plaza building outside Dhaka, in which 1,100 workers were killed. It would be an exaggeration to say that working conditions in Bangladesh’s garment industry have been transformed; the labor market is still very competitive – but the profits to be gained in the industry have created incentives for far more hospitable working conditions. Today’s factories tend to be clean and efficiently run. In 2015 Bangladesh exported over $26 billion worth of clothing, second only to China.

Demographics have played a fortuitous role as well. Eighty percent of workers in the garment industry are women, and it is clear that economic empowerment of women tends to have an outsized influence over economic development generally. Among Muslim countries, Bangladesh has long enjoyed a reputation for religious tolerance. There has been some unrest and inter-religious violence in recent years — but far less than has been seen in, say, Pakistan. Most encouragingly, economic and health indicators for women in Bangladesh have improved across the board since the early 2000s. The broader demographic picture is favorable as well: unlike many developing countries, some 40% of Bangladesh’s population is now in its most-productive age range: 25-54 years.

In a country starting from as low an economic level as Bangladesh has, what these trends lead to is the rise of a middle class. “Middle-class” can be defined in various ways. Business interests looking for marketing opportunities in Bangladesh seem to be defining it as a household income of $5,000 a year or more, a level of income that tends to allow Bangladeshis to buy “luxury items” such as air-conditioners, refrigerators, or automobiles – all of which are beginning to sell well in Bangladesh.

Meanwhile, in Dhaka

It certainly stands to reason that the lion’s share of economic growth and activity in Bangladesh would be taking place in the capital city. That’s where everyone is going; that’s where things are happening. Yet that is where the chaos is greatest! Many commentators have reported that Dhaka’s most defining characteristic is its horrendously snarled, essentially immobile transportation situation. It takes literally hours to get anywhere in this city. A relatively small number of automobiles have recently appeared in the city; they confer prestige and status, but the streets are by no means designed for them, and they take up a lot of room. In fact, people try to get around Dhaka in every imaginable kind of conveyance, from rickshaws and donkey carts, to the small three-wheeled motorized taxicabs that are quite common, to bicycles and feet – all trying to make their way through the same narrow and frequently-flooded streets. Indeed, the rivers of Dhaka are nearly as crowded as the streets; watercraft of all sizes (and degrees of repair) careen dangerously around the city on the rivers. The entire transport picture in Dhaka is one of nearly-incomprehensible randomness and chaos. It’s very hard to imagine how goods get to market, how business people get to appointments or how children get to school.

A great deal could be done to improve the flow of traffic in Dhaka. It would take careful study, of course – and any solution would have to account for all of the local, organic factors of Dhaka’s unique traffic situation. Simply dedicating certain pathways to each of the many different kinds of conveyances that are now poured onto Dhaka’s chaotic streets would be a tremendous improvement. If the tricycle taxis, for example, didn’t have to dodge the rickshaws and the donkey carts, they could vastly decrease their travel times. If I could suggest a policy, I would ask a consortium of well-placed foundations, such as the Gates, the Clinton, the MacArthur, etc., to pull together a fund of $300 million to design and implement a comprehensive traffic flow plan for the city of Dhaka. This plan could not simply come from outside experts. It would have to be designed, from the ground up, with input from the people who actually live in and try to travel in Dhaka. Such a well-funded plan would probably even have some money left over to start creating some of the necessary infrastructure. But the initial plan’s goal would not be to build a lot of superhighways, but rather to come up with a comprehensive plan that would help Dhaka make the most efficient use of its existing roads, streets and waterways. Of course, new transportation infrastructure – including public transportation systems – would be forthcoming. But that calls for more funding. Let’s talk about that in a moment.

It might be reasonable to expect the United States government to contribute some of this exploratory funding. One might think the US would benefit in terms of goodwill as well as business – but that’s not going to happen. Our current administration simply thinks that “those Muslims” want “our jobs.” Our current administration is in fact quite stupid about this. You can get a perfectly-good pair of Bangladesh-made jeans at Walmart for twenty bucks. But have you priced a pair of 100% American-made Levi’s jeans lately? Their most popular pair, model 501, original fit, will run you $168. Other US-made Levi’s jeans can be had for as little as $88. Sometimes shipping is free.

We have a few modest proposals

Here at Earthsharing we pay a lot of attention to the issue of public revenue; we don’t seem to be able to avoid it. But, it’s not merely an obsession; we believe that society’s choices about public revenue reveal the most important aspects of the essential relationship between individuals and the community. The leading source of tax revenue in Bangladesh is the value-added tax, or VAT, at just under 30% of overall revenue. The next-largest sources are import duties and personal and corporate income taxes — which take relatively smaller bites. From a business-competitiveness point of view, the news is somewhat good; Bangladesh’s ratio of tax rate to GDP is considerably lower than India’s. Nevertheless, the VAT is by no means an efficient or advantageous source of public revenue. It is sometimes defended on the grounds of encouraging exports — particularly, if the country exports a lot to the United States, which, luckily, has no VAT. But that is hardly a good reason to have a VAT at home – not if there is a better alternative.

Well, there is. A landmark 2010 study, done by Ahsan H. Mansur and Mohammad Yunus for the Policy Research Institute of Bangladesh, detailed the many inefficiencies of the VAT in Bangladesh, and recommended replacing it with the system of broad-based capital gains and land value taxes.

The Khan Mohammad Mridha Mosque in Old Dhaka

As you might expect, Earthsharing recommends land value taxation – most particularly in crowded, growing cities. It’s certainly likely that a place like Dhaka has many lingering land-tenure and cadastral issues. Yet these problems are unlikely to be intractable. The city certainly has a functioning and indeed lively real estate market. Given the extreme density of population – and therefore the intense level of involvement of Dhaka’s people with literally every square inch of the ground they occupy, it stands to reason that the people have a very clear seat-of-the-pants understanding of what Dhaka real estate is worth. Under such conditions, a highly-accurate land cadastre would require just two things: a sincere desire among its organizers to find and publish accurate data, and real input from normal people. These aren’t sure things politically, of course, but they are at least conceivable.

Various accounts track real estate values in Dhaka as having risen by about 90% over the past ten years. It seems that some cautious optimism would be justified about the positive effects of $300 million being effectively spent on designing and implementing improved traffic-patterns in Dhaka. How could that not bump up land values?

So: here are my modest proposals. I don’t claim to have any particular political sway over the situation, obviously – I’ll just submit that they make enough sense to merit real consideration. First, Bangladesh should scrap the VAT. Just do away with it; it never was any good. The roughly 29% of national revenue it now provides could be made up with land value taxes over a three-or-four-year phase-in period. In fairly short order, buildings, commerce and even personal income could be made exempt from taxation. Would that not accelerate all of the positive economic trends in Bangladesh, and even, possibly provide funding to help abate some of the most dangerous threats posed by climate change?

It does not do to try to minimize or gloss over the exceedingly daunting problems faced by developing megacities such as Dhaka. Yet at the same time, it has been well established that the overall ecological footprint, the economic efficiency and the per-capita sustainability of production improves when poor people move from stressed, impoverished rural areas into cities. With all of Dhaka’s urban stresses, those processes are manifestly going on there, right now. With some sensible city-planning and public revenue policies, this “world’s most chaotic city” could become a great 21st-century success story.

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Sandtown: Too Far Down?

When do we just walk away? How far down does a neighborhood, or a city (or a nation, or a planet) have to go before we accept that the cause is lost, that no reform or movement can save it?

Ursula LeGuin’s “Hainish” series of novels deals with a federation of planets, far in the future. These stories represent our planet in a chillingly matter-of-fact way. Hundreds of years before, Earth had been rendered all but inhabitable by war and pollution. Little mention is made of this in any of the Hainish novels; it is just a sad fact of their history. As such — for LeGuin is a master at creating fully-formed, believable alternate worlds — this brief treatment of Earth’s possible future is deeply disturbing.

There are a number of islands and low-lying regions, around the world, that will likely have to be abandoned as sea levels inexorably rise over the next few decades. The Indian Ocean nation of Maldives, for example, averages 1.3 meters above sea level, and is disappearing rapidly. In Bangladesh, a third of the country’s land area floods every year, and farmers have been forced to develop rafted crops that can float above what used to be their land.

Mural of Malcolm X, Nina Simone and James Baldwin by Baltimore artist and teacher Ernest Shaw

And then there’s Baltimore, Maryland, the once-proud port and industrial city, home of the Orioles, distinctive marble front stoops that rowhouse residents would lovingly polish, and more registered historical monuments per square acre than any other US city. These days, though, it’s the setting of the dystopian TV hit “The Wire,” and the scene of epic conflict between the police and the populace.

Baltimore’s problems are particularly focused in the storied neighborhood of Sandtown (officially it’s called “Sandtown-Winchester”). In years past, Sandtown was the city’s preeminent African-American neighborhood. Prominent natives include Billie Holiday, Cab Calloway and Thurgood Marshall. Its nightlife was legendary; in the 50s and 60s all the top black performers made sure to perform in the nightclubs on Pennsylvania Avenue. The long-enduring Arch Social Club on Pennsylvania has been bringing men together for games, music and drinks since 1905. Now it is an outpost in a desert.

The Arch Social Club

Sandtown today is better-known as Freddie Gray’s neighborhood. If you’re just joining us, Freddie Gray was a 25 year old Baltimore man who was arrested for no reason other than fleeing the police (which Baltimoreans routinely do, just usually a bit less suddenly). After Gray was fatally injured in the back of a police van, six officers were initially placed on paid leave — and were then acquitted of homicide in his death. This led to widespread protests, some of which became violent.

Of course, there is more to it. After the assassination of Dr. Martin Luther King in 1968, Baltimore endured riots that were much larger and more destructive than the “Freddie Gray uprising.” Furthermore, though Baltimore started losing manufacturing jobs in the 1960s, it was after the 1968 rioting that its population really started to fall. There are large swaths of abandoned houses in Baltimore that have stood empty since then. The sad truth of the matter is that many of Baltimore’s neighborhoods were abandoned after 1968, and have never recovered.

In 1960, Baltimore City was home to 939,000 people. Its population today is just under 615,000. Along with this decline, the city’s racial and economic composition changed drastically. The processes of “white flight and urban decay” were going on in many US cities during this period, but they seemed to hit Baltimore especially hard. The basic outline is well-known: the tax base dwindled, schools (and all manner of public infrastructure and services) suffered; crime burgeoned.

Nobody would deny that police officers in Baltimore have a hard job. Recently there have been reforms, body cams have been adopted and sensitivity training has been undergone. Yet these problems are deeply established. Addressing them will demand lots of time and patience. Today, 44% of Baltimore’s police force is African-American, and less than 50% is white. Nevertheless, about 65% of Baltimore’s people, and over 95% of Sandtown’s residents, are black. The police seldom live in the areas they patrol. It’s pretty much inevitable that they would come to be seen (and, perhaps, to see themselves) as an occupying force in hostile territory. In black neighborhoods there is no incentive to cooperate with the police, and strong reasons not to. “Snitches” are hated. In 2002 a family of seven died when their house was firebombed after they alerted the police to drug dealing and other crime in their neighborhood.

Jobs are scarce. For young black men, or for those with felony convictions, they are nonexistent. Drugs filled an economic void. There was a strong incentive to recruit kids, young enough to be prosecuted as juveniles, for handling and retailing illegal drugs. All of these factors led to a truly terrifying social spiral. In Sandtown, every socioeconomic indicator bottomed out. For example, unemployment in Sandtown stands at 21%; more than 55% of households have an annual income of less than $25,000. There are twice as many stores that sell alcohol and tobacco as in the average Baltimore neighborhood. One in every four buildings in Sandown is vacant. Not surprisingly, this neighborhood has the highest number of felony convictions per capita in Baltimore.

I have been reading about Sandtown with sincere interest, but I’ve never been there. Were I to go, I doubt that I would feel either welcome or comfortable. I’ve had to tour the neighborhood using Google Street view — which shows people walking around, or sitting on stoops, their faces blurred out. In my virtual strolls, I noticed three pervasive aspects of the neighborhood. First, of course, is all the abandoned buildings; they’re everywhere. Second is the striking number of churches. One can hardly travel more than two blocks without finding another one, and they range from proud century-old edifices to basement congregations with a cross painted on the street-side wall. Third, one sees how few businesses there are in this neighborhood. Baltimore counts a fairly high number of small markets and take-out places in Sandtown. But one soon sees that these “businesses” are very rudimentary. Any fool can see that there is little legal entrepreneurship in Sandtown.

As if to finally prove the hopelessness of the situation, in the 1990s the Sandtown-Winchester neighborhood was given a big dose of special financial help. The Enterprise Foundation, an organization specializing in funding and constructing affordable housing, raised $130 million to spend in Sandtown in an attempt to show that a comprehensive effort could succeed in revitalizing a single neighborhood. Unfortunately, there seems to have been little to show for all this investment. A 2015 study examined Sandtown’s rates of various indicators of well-being, including educational levels, employment, lead-contamination, murder rates, etc. — and found that homeownership was the only indicator that improved during this time; it went up by some 30%. Unfortunately, this came at a time when homeownership in such a place is a precarious investment, for all the obvious economic reasons — and then, the great crash of 2008 delivered a body blow, causing home prices all over Baltimore to plummet, and creating a jump in foreclosures throughout the city.

Notwithstanding all of Sandtown’s scary challenges, there are still people who raise children there, send them to school, go to church and to work. There are still people there who have neither fled, succumbed to addiction nor joined street gangs. There are still people in Sandtown, in short, who are doing their best to make a living.

Such folks are aware that Baltimore, which has been struggling for decades to fund adequate schools and basic services, has a conventional tax system. There is a property tax on land and buildings; there is also a small state property tax. There is a personal property tax, falling on various forms of movable and capital property; this imposes a particularly tough penalty on small business. And there is a flat city income tax of 3.12%. Given the many economic challenges that face anyone trying to make a living in a place like Sandtown, it seems likely that these tax burdens put the last nail in the coffin of entrepreneurial opportunity.

By now, Earthsharing readers should be somewhat familiar with the Henry George Theorem. Briefly, this theorem, which is an accepted part of today’s economic canon, states that in any reasonably well-run city, the annual rental value of its land is a sufficient fund for all of its public infrastructure needs. As a city invests in public infrastructure and services, these things enhance its land values. Public services that are paid for by land rent, in fact, finance themselves.

This suggests a modest proposal that could be made for a place like Sandtown. There is precedent for a program that targets a single needy neighborhood. But what’s the use? Society threw $130 million at Sandtown and it didn’t work. Yet it is possible the local entrepreneurial choices, small at first, can be better-targeted and more effective than a clumsily-targeted outside initiative.

Here is a suggestion for a pilot program. Suppose, within the boundaries of Sandtown-Winchester, we eliminate the city taxes on buildings, personal property and income. This would mean that a renovated residential building, or any new small-business investment, would be tax-free. Say someone wants to open a grocery, a bar, an auto-body shop or even (dare one dream!) a bookstore. Suddenly it would be more attractive to establish these businesses in Sandtown than in surrounding neighborhoods that still labor under conventional tax burdens.

If Sandtown eliminated all those taxes, where would it get its revenue? It’s probably worth saying that today’s Sandtown is not a huge revenue source for the city of Baltimore. Its underground economy is likely considerably larger than its taxable economy, in any case. But in our pilot project, anyway, what revenue Sandtown did bring in — which will probably not be far short of, and might even exceed, what it currently brings in — would come from a tax on its land value.

We can’t expect miracles. Sandtown, along with other neighborhoods like it, has been deeply troubled for a long time. Yet one can imagine that the people who live there, who have had so little reason for optimism, might rally around new businesses and renovations — might help to support and protect them. If, indeed, it’s ever time to give up on a neighborhood, that day isn’t here yet. A basket case can still hold the building materials of a healthy community.

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Flooding in Houston: No Real Surprise

Officials kept telling interviewers that nothing on this level had ever happened, that the flooding caused by Hurricane Harvey was a millennial event. This seems to have been both true and not true — and really, more the latter. Turns out that this is the third 500-year flooding event Houston has seen in the last three years. Something is definitely going on here. It seems likely that climate change is a factor; many commentators noted that the waters of the Gulf of Mexico are alarmingly warm this year. That allowed the storm to quickly build in intensity as it swept toward the Texas coast — and, it allowed it to pick up that much more water when it veered back over the Gulf, and then dump it on Houston.

There is another factor: Houston’s motto is “the city with no limits.” This is seen metaphorically, of course, in the spirit of can-do American enterprise. Yet there’s some irony in the fact that it seems to have been taken literally, too: Houston seems to think it has endless land on which to build (and takes pride on having very few land-use regulations). Population has grown rapidly, and Houston has recklessly sprawled out, paving over absorbent grassland. Ian Bogost writes in The Atlantic: “Houston poses both a typical and an unusual situation for stormwater management. The city is enormous, stretching out over 600 square miles. It’s an epitome of the urban sprawl characterized by American exurbanism, where available land made development easy at the edges.”

Sprawl development is often seen as a natural process, just the way things are done these days. For example, back in 2005 the Lincoln Institute issued a report on “American Spatial Development and the New Megalopolis” that implied, with apparent approval, that sprawled-out exurban regions are the new normal, delivering a high quality of life and a good deal of convenience. The report made no mention of the environmental consequences of this mode of development. (It also claimed, dubiously, that urban centers had reached the limits of their infrastructures and would be hard-pressed to accept many more people.) As an example of the exurban model, Houston has been thriving. It is arguably the most diverse city in the US, and unemployment is quite low. Aside from flooding, Houston is nowhere nearly as bad off as many US cities. If you aren’t worried about egregious waste of land and resources, and miles and miles of impermeable pavement shunting water off onto lower-lying (and lower-income) neighborhoods, then Houston is doing pretty well.

Houston has three beltways. The first, I-610, now called the “Inner Loop”, became part of the Interstate Highway system in 1956, encircling the city of Houston proper, as beltways tend to do. A second 88-mile loop, Texas Route 8, or the Sam Houston Parkway, was begun in the late 70s and completed in the early 90s. Now, a third beltway is under construction: Texas Route 99, or the Grand Parkway, will be the longest beltway in the US, encircling an area the size of Rhode Island. Each new loop has, of course, raised land values further out from the city, and led to new waves of sprawl development. These new developments are not always middle-class enclaves, however. Josh Vincent, Director of the Center for the Study of Economics, notes

Keep in mind that Houston with ring roads like the 610 can get people in and out (in good weather) quickly from areas that have little apparent land value. That’s where a lot of low income and subsidized housing is built — I’d say most of it. They have little land value because they are intentionally placed in floodplains. The Feds still provide funding to rebuild after floods because that’s where the city wants low income housing. Climate change may well be playing a role, of course, but the city fathers are clear that they do not care to pay for massive infrastructure to handle flooding. If you look at the views of the flooded city, you’ll note that the bayous and streams are where they built most of the road infrastructure.

Indeed, the low-lying roadways are where a lot of the water has collected, which makes Mayor Sylvester Turner’s decision not to call for an evacuation seem sensible under the circumstances.

Two major reservoirs, called Addicks and Barker, were created in the late 1940s to help control flooding in Houston. They have been in the news lately because they are past full. To guard against this, some water had been allowed to spill out, in a triage maneuver that endangered fewer neighborhoods than it protected. Ultimately, though, both reservoirs began to overflow on their own. While it’s true that Harvey brought a staggering, unprecedented amount of rain to the region, it’s also worth noting that these two dams were initially placed well outside Houston’s built-up region. Today, they are inside the new beltway, surrounded by development.

Cars, after all, are how people get around in Texas. Houston does have some public transportation; in fact its systems have recently been upgraded. Two new light rail lines have been built, at the cost of $1.4 billion. City bus routes have been reorganized, switching from a wheel-spoke pattern to a grid, to improve frequency and decrease travel times without increasing cost. Though these improvements have been moderately successful, ridership on the new train lines has been lower than expected. It’s generally known that people don’t use public transportation in Houston unless they have no other way to get places. On an average weekday about 300,000 rides are taken on Houston’s buses and trains. In New York, whose city-limits population is about 3½ times that of Houston, weekday bus-and-train ridership is about 7.6 million.

I haven’t been to Houston, so I know nothing of its folkways and nuances. I don’t doubt that there are nice things about the place; one of them seems to be the great courage and fortitude with which Houstonians have pitched in to help their neighbors during the Harvey crisis. One architectural feature of downtown Houston, though, strikes me as, well, kinda creepy. There is a six-mile network of pedestrian tunnels beneath the center-city area. They are built out with shops and restaurants, and are accessible from the basements of prominent office buildings and hotels. They are not a municipal project; as an ad-hoc, private assemblage, they seem not to be very well coordinated or mapped. Perhaps knowledgeable folk can write and tell us why they exist. I could be wrong, but I suspect that they serve as a refuge from the street-level welter of cars, huge belching pickup trucks, parking lots, gas stations, multi-lane streets, service roads and U-turn lanes full of cars, cars, cars.

Center-city Houston. Minute Maid Stadium is where the Astros play these days. The building just to the right of the search bar is an 8-story parking garage. Another one would free up seven of those surface lots!

Metropolitan Houston — the area within I-610, the innermost of the three beltways — may have too many automobiles. But it cannot be said to have too many buildings, or to be unable to absorb more residential construction. There is abundant vacant land, lots of small, obsolete buildings and MANY surface parking lots (which, of course, absorb no floodwater). Some blame this on Houston’s lack of zoning, but that can only be a small part of the story, because Houston’s sprawl is mirrored in many cities that impose stringent regulations. It’s more accurate to say that the “city with no limits” merely epitomizes the exurban model of growth, which seemed so satisfactory for a while — but now shows itself to be not just unsustainable but dangerously unlivable. It might not be an exaggeration to say that in this day and age, the anti-sprawl efficiencies of land value taxation are not just a tool for urban revitalization, but a key to urban survival.

As of the end of August, 2017, it has been reported that at least 1,200 people have died in catastrophic flooding in Bangladesh, India and Nepal.

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Gun Culture

Recently I decided it was time to introduce myself to an aspect of American culture with which I had no experience. I began by picking up a copy of a magazine called Tactical Weapons.

I can understand the impulse to arm oneself in self-defense, and hunting is part of our culture and economy. But folks, the weapons in this magazine are next-level. Is it unfair to single out a trade publication dealing with law-enforcement and military hardware? Perhaps, but it seems odd that one would purchase such a specialized publication where I did: in between Hot Rod and Guitar Player at the supermarket. What uses do “normal” people have for the extreme weapons reviewed and lovingly field-tested in its pages? You’re not going after deer with these things. Are we talking about sporting, family fun — with unimaginably powerful and lethal weapons? Well, kind of.

This issue of  was dedicated to Chris Kyle, the murdered war hero, author of 160 confirmed kills on the battlefield. It featured reviews of long-range rifles, including the King Xcaliber, a top-of-the-line sniper rifle, which will pierce armor a mile away, and which you can buy for $13,900. For the less well-heeled, it also rates fifteen AR-15 variants in the $600-$900 range. For the ladies, ads offer cute pistols in designer colors.

I realize it’s a tough world. I understand that the demand for firearms is efficiently supplied by our great American free market (though, come to think of it, the Soviets seem to have been pretty good at it, too). A time may come when I, or my loved ones, would have to depend on the threat of lethal force. But if, recognizing such a need, I were to go out and buy myself a firearm, it would be something I’d do without a shred of glee. In the wake of the latest in a long series of senseless mass shootings, I am having trouble wrapping my head around the excitement, the bang people get out of guns. You know?

This excitement often comes with a strong load of righteousness. In some circles, the enjoyment of guns is evidence of real-world patriotism. It’s a dangerous world. A tyrannical state is bent on taking your freedom. A growing criminal underclass threatens your home and family. How can you be a Responsible Citizen without arming yourself to the teeth?

The opening editorial in Tactical Weapons, by Nino Bosaz, is titled “Guns, Patriots, Valor.” It extols the life and weapons of Chris Kyle, and puts into their carping little places those critics of the American Sniper film who “have little use or respect for the driving forces that kept Chris Kyle going during his valiant four tours of duty in Iraq — God, country and family.” Bosaz adds, “this issue puts the spotlight on the state of Idaho…. Be sure to check out the one-of-a-kind AR rifle put together by several Idaho-based companies. This rifle truly epitomizes the beliefs and steadfastness of our founders and framers — plus, she’s a real shooter!”

Gun-review writers contort their prose to mention legal, civilian uses for these weapons. The Barrett 98B, for instance, “scream[s] sub-MOA precision no matter the game or mission!” It’s a sniper rifle, people; there’s no game. (MOA stands for “minute of angle,” a relevant attribute for comparing the accuracy of long-range weapons.) The gun might be pricey, but it’s deadly enough that “$4,199 seems like a bargain, whether you’re a casual shooter or the purchasing officer for your police department, government agency or private contractor.” Similarly, the review of 15 “Best Bang” AR-15 rifles is lets us know that “These sub-$1,000 ARs can prove their place on the range or during missions without breaking the bank!”

Missions? I doubt that either the Pentagon or the Police are in the market for bargain-priced assault rifles. Or do they mean the mission on which the AR-15 was so effectively used at Sandy Hook elementary school? Or for which a dozen of them were equipped with “bump-stocks” to convert them from semi- to essentially fully automatic, as in Las Vegas?

Sorry. I was being effeminately petulant, there. The writer was referring to missions to defend Our Way of Life against Bad People.

Conveniently, the training one needs to be ready to fight the gummint also makes for good old family fun at the range. What could be groovier than firing 186 founds per second from the six barrels of an M134 GE machine gun (billed on YouTube as “the most fun you can have with your pants on”)? Or, for a serious law-abiding good time, you could get your hands on a Barrett M107 50mm, the most powerful rifle legally available without a special permit. In one video we see a former national pistol champion, with one shot, penetrate a 3/8″ steel plate, vaporize a watermelon (“That melon didn’t like it very much.”) and shatter a four-inch concrete block. In another video a series of guys take turns firing the big Barrett. We don’t see what they’re shooting at (the target isn’t the point). Each guy lowers himself carefully before the Barrett, peers into its precision optics and squeezes the trigger. The gun has a high-tech recoil-suppression mechanism, but it still delivers a wallop to the shoulder. Having shot, each man staggers up, giggling softly, and wanders off camera, possibly to change his underpants.

I get it: guns are awesome machines, as appealing in their way as cars, or computers. If folks want to shoot guns — safely, for their own enjoyment — how can a free society restrict them from doing so? Hammers don’t drive nails; people drive nails.

However: the legal arguments regarding gun control are not the interesting thing about this. Innocent techno-amusement is just one small part of gun enthusiasts’ enthusiasm. Elements of patriotism, righteous duty and America’s Greatness are all stirred up together into a big ol’ Texas chili of faith-based fun.

Gun enthusiasts are thrilled to pick up an AR-15 Bushmaster or an AK-47 Kalashnikoff (there’s a lively sort of Ford vs. Chevy rivalry about them) add a “bump-stock” kit to restore its fully-automatic functions, and spray hot death (safely, responsibly, on ranges). They compare the lethality of various kinds of ammo, becoming poetic about the damage this or that “load” will do to the vitals of a dirtbag dumb enough to invade your domain. Or one might prefer prefer the close-quarters awesomeness of a Tec-9 automatic handgun, with a 32-round magazine.

Folks, these guns are made for combat. Some of them — auto or semi-auto weapons with magazines holding more than 10 rounds — were banned by federal law between 1994 and 2004. They no longer are. I’m not suggesting that their sporting use should be controlled by the Thought Police, or outlawed by the Nanny State. I do think, however, that their sporting use is weird enough to bear some examination.

Seeking insight, I turned to a prolific team of You-Tubers from Georgia, creators of the popular “Gun Gripes” and “Five Guns” series. Thirty-something Eric is the factotum of the outfit, the main narrator of the series. He’s a bit chunky, as if he enjoys his beer and his Mama’s cooking, but he certainly knows his firearms. Barry, who sports a Duck Dynasty beard, is the elder statesman; in more-serious segments he dons a tweed jacket and is introduced as “Professor Barry.” Both Eric and Barry wield the additional authority of being combat veterans. Sometimes, on lighter topics, shoppers’ guides such as “Five Guns for the Zombie Apocalypse” or “Five Guns for Scaring Your Daughter’s Boyfriend,” Barry is replaced by the coming generation: trim, chipper, goateed Chad, who has a daughter on the way. And he will be, going forward: Professor Barry passed away in 2014 — but “his work lives on informing and inspiring the Second Amendment Community.”

Their presentations are lighthearted (and get millions of views), but Professor Barry made sure his viewers understood that this is serious business. In “The Psycology of Gun Ownership” (sic from the opening credits), he berated people who want to buy cheap guns, just to brandish them and scare people. Barry advised us to get a gun that we can handle, and practice until we’ve committed to reflex the skills needed to dispatch a dirtbag. Also, one should always carry two guns, because if an assailant manages to grab your weapon, he won’t expect you to have another one. That’s right, friends: it’s tough out there.

The Zombie Apocalypse is a key metaphor for these folks, “Preppers” who stockpile ammunition, arm themselves to the teeth and train to defend against a mindless, implacable enemy bent on taking their guns, their freedom, their women. (Who but Donald Trump has the courage to publicly warn us about the coming horde of Mexican rapists?) The views put forth in this YouTube channel (one of many) are self-reinforcing: of course they’ll be ridiculed by liberals, zombies, those who can’t handle the truth.

I have to say, though, that the frothy mix of moral fervor, righteous indignation and good ole shootin’ stuff leads to some unsettling images. Eric and Barry’s “Ghetto Marksmanship” segment is pretty creepy. Then there’s a channel called “Demolition Ranch” in which a frat bro from Texas A&M obliterates a pile of garbage with his Tec-9 automatic pistol. But the most nightmarish one I’ve found is an appalling promo for a new kind of ammo, with a serrated leading edge that “acts like a hole saw,” and flies apart into eight little chisels inside soft tissue. The spot is titled “ESAU Gone Rip You Niggas To Shreds RIP.” RIP (“Radically Invasive Projectile”) is the trademarked brand of the ammunition.

(I didn’t get the meaning of “ESAU” until I found this in The Urban Dictionary: “The greatest criminal ever to walk the Earth. Satan incarnate. Better known as the white man. Term comes from the biblical name for caucasians.” Oh. OK.)

Moss Pawn & Gun

The headquarters of Eric, Barry and Chad is Moss Pawn and Gun in Jonesboro, Georgia. The business offers loans on your car, boat, musical instrument, whatever; it buys old jewelry, and it sells a wide variety of fireams and ammunition.

Jonesboro is an old Georgia town that seems to have been engulfed by the sprawl that has crept, kudzu-like, out from Atlanta. Its population in 2010 was 4,724. It has a few notable southern-cultural items; much of the film Smokey and the Bandit was filmed in the town; Lynyrd Skynyrd took an album-cover photo there; the fictional plantation of Tara was five miles away. Jonesboro’s population is 73% African American; 20.2% of its population lives under the poverty line (34% of those under 18).

The Moss Pawn & Gun guys say nothing (in so many words) about racial issues. I feel certain that they would deny having any problem with (and would happily sell guns to) law-abiding citizens of any color. But, they do talk quite a bit about zombies, dirtbags, ghetto marksmanship, and strangers against whom they must protect themselves by wearing two guns. Poverty makes everything more difficult, and weather in Atlanta tends to be hot and humid. I think it is likely that Eric and Chad feel themselves to be, through no fault of their own, surrounded by a tense, hostile population that is struggling for bits of a shrinking economic pie. But they’re on top of it. They’re well-armed.

For Eric and Chad, and folks like them in an affinity group that is large enough to exert some serious grassroots political influence, The Second Amendment is the linchpin of the American way life. Hell, it’s pretty much all they’ve got left — after the 14th Amendment, Social Security, The United Nations, the Voting Rights Act and Obamacare. There’s no way to change that by trying to ban weapons. But, I can’t help thinking that if economic opportunities weren’t so scarce — if “our jobs” didn’t seem to be under such constant threat from “them” — then I suspect things could calm down a bit, and patriotic Americans wouldn’t need quite so much hardware.

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Whither Homo Economicus?

by Lindy Davies

You walk up to a food counter in a train station. You have five minutes to grab a bite before you have to board your morning train. A grumbling young woman, who exudes contempt for you and for every other customer in the line, charges you a premium price for a leathery, slapped-together breakfast sandwich which, nevertheless, takes another three minutes to get to you. She and her colleagues are distracted; each of them likely has a long list of personal problems — but all you know for sure is that she has made your breakfast transaction thoroughly unpleasant. You have encountered Homo Economicus.

eatit“Economic man” is a key template for economic analysis. It assumes that we respond to the problem of scarcity with profit-maximizing behavior— or in other words, we try to secure material gain in the hardest-nosed, most self-interested way. Many people are uncomfortable with this idea: is it a simplifying assumption — or is it simply nonsense? People bristle at the notion of self-interested maximization. What about fun? Family? Spiritual Life? Cat videos?

And, anyway, we are often observed choosing to do things that aren’t “economical.” Someone drives into a convenience store twelve days in a row and buys a soft drink. The buyer could make a single trip to a supermarket and buy a twelve-pack of same beverage for 40¢ less per bottle. Who knows what constitutes economic behavior? Perhaps the soda-drinker had a crush on the cashier. Perhaps he liked to thumb through the magazines on sale there. And, anyway, the soda has zero nutritional value, so it’s really hard to say what’s going on in any sort of practical terms, but, well — he keeps buying those sodas.

“Economic Man” in Economic History

This issue isn’t new; it was recognized by the classical economists. John Stuart Mill was the first to refer to “economic man.” He made it clear that he saw Homo Economicus not as the whole person, but only that part of the person which concerns the science of political economy,

…an arbitrary definition of man, as a being who inevitably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial with which they can be obtained.

Henry George added the clarifying insight that the desires we seek to satisfy are entirely subjective. Contra Adam Smith, George pointed out that our desires aren’t necessarily selfish; they might be spiritual, or altruistic. Whatever our desires are, anyway, we try to satisfy them with the least “irksome toil” (and, what constitutes “irksome toil” is also subjective: one person’s hard labor might be another’s best fun).

When we undertake irksome toil, unwilling to do so without compensation, seeking to do as little of it as we can — our behavior falls under the definition of Homo Economicus. Obviously, we want to spend as little time as possible in that state. We want to get mere profit-maximization out of the way so that we can enjoy our free time.

Despite the tremendous progress of labor-saving technology, there is still work that people have to do. People are still called upon to pick up garbage, change diapers, unclog drainpipes, guard convicts, seize territory, do laundry, teach children, serve all-night customers, patrol streets… and, even, write books. Will there ever be enough labor-saving inventions to get the Homo Economicus out of human lives? In Sacred Cows and Other Edibles, Nikki Giovanni offered an interesting point of view on this question:

I like my profession. I hope the telephone operators, the hamburger turner at McDonald’s, the pressure checker at Kentucky Fried who see to it that those spices and herbs get really deep in the chicken are proud, too.

colonelAt first, I thought Nikki Giovanni (whose poetry I like very much) was being facetious. She had the talent, drive and good fortune to enjoy a career as a poet. That didn’t necessarily make her life easy, but I think she’d choose it over frying chicken for Colonel Sanders. Eventually, though, I realized that her point is unassailable: if the chicken fryer doesn’t care about her work, everyone suffers. True, she is underpaid; most workers are. But, jobs are scarce: more personable and diligent workers are eager to take her place. Giovanni is telling us that, despite the manifest injustice of our society, one can still choose to be a person. Remember that young woman at the breakfast counter? She was resigned to being Homo Economicus — and you’re not going back to that breakfast counter, if you can possibly avoid it.

You might point out that it is in a worker’s economic interest to be more pleasant, so she can hold onto her job. But, I suspect that she cares very little for this job; she considers herself to be a worker, (impersonally, insultingly) hired to do a (dull, underpaid) job; perhaps her situation is a notch above abject slavery, but it’s not far above it. She is, in a word, alienated.

Is Social Progress Linear?

“Alienation” is something that Marxist theory has a lot to say about; indeed, it is said to be the basic condition of workers under the capitalist more of production. Marx saw workers as suffering from a four-fold alienation: from the things they made, from the process of making them, from their own selfhood, and from other workers. This cubicle of alienation in which workers (inevitably) find themselves is a big part of the reason why Marxist theory sees revolution inevitable, and capitalism doomed.

Others, however — such as Henry George — see the possibility of fundamental reforms that would make a market economy work for everyone. If we all seek to reduce the amount of irksome toil we have to to perform, it follows that a progressive society would be able to reduce the net amount of time that its people spend behaving as Homo Economicus. This would imply a continuum of social progress. At the bottom is slavery: a slave, compelled to perform “irksome toil” to survive and avoid punishment, is pure Homo Economicus. At the top, we might find an artist: getting paid for for work that was done for the sheer joy of doing it.

Then there is the joyous, painful endeavor of raising children — where does that come in on the scale?

Let’s consider a few examples:

Autoworker Aaron works for $17/hr in a nonunion Toyota plant, and has to make a decision about whether to join a union. He decides against it, because $17/hr is better than any alternative that’s available to him, and he doesn’t want to jeopardize his job.

Autoworker Betty is a member of the Communist party working at the Totota plant, and works behind the scenes to organize coworkers. Her activism is frowned on by her supervisors, who stick her with unpleasant tasks and don’t recommend her for promotion.

Dad Charlie chooses to forgo his career and stay home with the kids. His wife makes good money, but has a stressful, long-hours, fast-track career. Charlie’s role as a home support person makes it all work.

Mom Diane chooses to forgo her career and stay home with the kids. They’ve moved to a low-rent area and her husband is working part-time. They don’t have much money, but they have plenty of time together as a family.

Mom Ellen and dad Frank both work full-time. The kids are in pre-school, and after-school activities. They need to do this to keep up with their mortgage and all the other payments, and try to put some money away for the kids’ college educations.

Dad Greg and mom Harriet would both be working full time, if they could both find jobs. As it is, they work as they can, often on conflicting schedules. They’ve had to get help from friends and family to get by, and finding responsible supervision for the kids is a constant challenge.

diyNeighbor Ian worked overtime to save up enough to hire a contractor to build an addition to his house. Neighbor Jim made sure to have a flexible work schedule (at a lower pay scale) and built his home addition himself.

Can you divide the Homo Economicus behavior from the “for my own good reasons” personal behavior? Which of those examples do you admire? Which do you feel pity for? The further we rise, economically, above abject servitude, the more ambiguous this question gets. It gets harder to separate the time we spend making a living from the time time we spend pursuing personal satisfaction — each blends into the other.

The question is by no means simple. A progressive society, as we’ve seen, is one that succeeds in reducing the net amount if time its people spend as Homo Economicus. But, if we cannot clearly separate out the portion of our labor time we spend that way, then how can we make that distinction? How can we tell (in the aggregate) whether we are gaining or losing?

On the other hand, “gaining,” in the sense of moving along the line on which society is advancing (or retreating) might not be the only option, or the best way to look at things. Marxist theory sees human society as moving along a time-line from feudalism, through capitalism, on the way to socialism and the Workers’ Paradise. Henry George’s conception of social development also sees society as moving along a line, either forward toward a progressive society that maximizes both association and equality, or regressing, failing the promise of civilization, declining into a new dark age. Marx, I suppose, would transform Homo Economicus into Homo Comunismus, a fit and happy team player. Henry George would reduce Homo Economicus to a vestige, no more onerous or stressful than brushing one’s teeth. (Some versions of Marxist utopia, as well, have technological development enabling workers to sample many jobs and switch them at will.) These outcomes are, at best, a long way off. In the meantime, is self-interested maximixation all we have to look forward to? (Or as Nikki Giovanni put it, “Spam, Used Cars, and More of the Same”?)

When was Homo Economicus Born?

It may be, however, that in terms of economic behavior, society does not move in a line. There may also be a recursive process at work. Another possible starting point for social/economic development is the traditional society. There are various kinds of traditional societies, of course, but compared to the paradigm we’d call modern, industrial or developed, there are things they have in common. I think it would be accurate to say that the behavior we’ve been calling Homo Economicus was rarely, if ever, exhibited in traditional societies. True, there were fights over land and resources, and there was even slavery. There was drudgery and hardship; winters were long; lifespans were short. Nevertheless, in no indigenous culture was it the norm for people to spend substantial portions of their time performing meaningless tasks in exchange for things. We take this behavior for granted; our ancestors didn’t.

likitIn an earlier stage of industrial development the “labor time” model made perfect sense. It didn’t matter that the work might be meaningless, because the efficiency of industrial production made it possible for everyone to be better off. As productivity continued to increase, workers could organize to collectively bargain for better wages. In the United States this process reached its peak in the industrial golden age of the 1950s and 60s. While not everyone was happy (African Americans, for example, were effectively excluded from the general prosperity), millions of US workers were quite happy to get paid $25 an hour, with pensions, health plans and paid vacations, for being Homo Economicus.

It seemed like such a good plan: you get a decent job, put in the hours, get raises, buy a house (a comfortably appreciating asset), raise kids, send them to college, and then get rewarded for your career of homo economizing by settling into a well-provisioned retirement. But then “our jobs” started getting sent overseas, real wages stagnated or fell, and things started getting confusing. Raising a family started to require two full-time salaries. In the prevailing myth, June Cleaver and her friends had happily done the cooking and the childcare as their part of the family bargain. Now, suddenly, they were too busy, and these “household” tasks increasingly became part of the economy. Should June have received Homo Economicus wages for handling all those poopy diapers?

Such a question would never have come up among the unassimilated Sioux, or Inuit, or Australian Aborigines, the Kalahari Bushmen, or the artists of Lascaux or Mesa Verde. Such societies had their problems, to be sure, but alienation, in the sense that Karl Marx described, was not one of them. The Georgist economist Fred Foldvary put it this way:

Human beings did not start out poor, hungry, needing development. Primal man had natural wealth from the bounty of nature. Only after humanity turned to agriculture and conquerors took the land did the brave hunter become a lowly peasant working for a wage pittance from dawn to dusk while the lord dined on wine and game hens under chandeliers. Only after the descent to serfdom does development beckon with the promise of increasing productivity.

It has long struck me that the economic analysis of Henry George, dealing as it does with the pervasive, unavoidable role of land in society, offers a key theoretical bridge between traditional and modern ways of seeing the economy. When indigenous people admonish European colonists that “The land does not belong to us; we belong to the land,” they are not being romantic. They are making an entirely reasonable and true statement that arises from a worldview in which there is no Homo Economicus. That statement only seems quaint from the point of view of industrial society, which is predicated on owning the land and controlling its resources.

digitBut: industrial society has reached a turning point. We can no longer afford to reckon “economic growth” without factoring in its effect on the natural world. And we live in a dysfunctional society in which, in James Baldwin’s words, “not even the most spectacular recipients of this prosperity are able to endure these benefits; they can neither understand them, nor do without them, nor can they go beyond them.” (Soccer moms cannot escape this dilemma in their SUVs.)

I think we need to return — without turning away from the benefits of science and technology, for there can be nothing evil in science and technology per se, only in the self-serving uses to which we put them — to a life in which we are part of where we live, in which we are nurtured and informed by our place and our community. By doing so, we may be able to develop a sustainable understanding of “economic growth.” And then we can finally put Homo Economicus to rest. Not because there will no longer be work to do — but because the challenges of devising a sustainable future will leave us no time for the “irksome toil” that industrial development so usefully, efficiently, imposed on us. What we have to do will be too important not to care about. We will have to keep it real.

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On National Sovereignty

by Lindy Davies

It’s become a convention, on the news, to refer to the Jihadist force that’s been gaining ground in Iraq and Syria as the “so-called” Islamic State. This seems to be a requirement. Sure, they call themselves a state — but they’re not! States are sovereign. They have governments, and ambassadors and such; they have seats in the UN General Assembly — like Syria, for example.

What is it, really, that constitutes a sovereign nation?

To begin with, it has to do with authority and control; we think of it as “where the buck stops.” It may be comforting to think of this as an absolute thing (i.e., Israel absolutely has it; the Palestinians absolutely don’t). But it is not all-or-nothing, of course; there are degrees. The “national sovereignty” of a place like “The Republic of South Vietnam” (or post-Dubya Iraq) is an evanescent thing, crafted on the fly to suit the interests of a larger power. Nevertheless, international diplomacy rests, however shakily, on the concept of national sovereignty. So far in human history, is nations that make and enforce laws. International law is an ad hoc matter. It is enacted by means of treaties, and only enforced at the national level, if nations choose to do so. (Has the International Criminal Court ever compelled the United States to do anything?)

Nations have various degrees of power, and various degrees, alas, of legitimacy. If the nation is not powerful enough, it may fall to conquest by external powers. But what if it is not legitimate enough? The (so-called!) Islamic State’s legitimacy is bestowed by Allah — the same Deity that confers legitimacy, via the Queen, to land tenure in Great Britain. (It has to be the same Deity: both faiths believe there is only one.) The classical Chinese concept of national legitimacy was called “The Mandate of Heaven.” It was thought possible for a ruling dynasty to lose this, become illegitimate, and become deposed. If a nation is not legitimate enough, therefore, it may succumb to internal revolutionary forces.

Eventually, Divine bestowal of sovereign power came to be vested in hereditary monarchs. In the minds of the Enlightenment philosophers, however, sovereignty came to rest in the incontestable, and infallible, will of the people. Thomas Jefferson, for example, wrote that governments are instituted to secure the people’s inalienable rights, and that their powers — if they are just — are derived from the consent of the governed.

This raises questions. Who are “the governed”? How is their consent ascertained? How, and where, and in what ways are they to be “governed” — presumably through the exercise of the sovereign powers of a “government” which the people have chosen? According to Jefferson, a governments just powers are derived from the consent of the governed — and it wields those powers through the process of creating and enforcing laws. Does this mean that if a majority of a nation’s citizens decide, through some representative process, that slavery is OK, then slavery is OK? Well, it’s legal, anyway; fee-simple private ownership of human beings was legal in the United States for 75 years.

verb
“Nation is a verb.”

Furthermore, the idea of government cannot be separated from the question of jurisdiction. Over what area does sovereign control extend? There is no global government. Our concept of sovereignty is inextricably bound up with the idea of nationhood. Now, sometimes we might speak of a “nation” in spiritual or cultural terms — a holy covenant? a community brought together by its victimhood? a romantic generational consciousness, such as the “Woodstock Nation”? But, in stark political terms, such notions are frivolous. In the “real world,” nationhood is a matter of jurisdiction over a defined portion of the planet: a territory — a piece of land.

Job #1 for any nation is the administration of its territory: its boundaries and their defense; the duties and prerogatives of states, municipalities and other lesser jurisdictions; and — most important — what people can do with that territory: what rights they have to its possession and use. This has obvious economic implications, because all economic activity must use land in some way. It is incumbent upon a sovereign nation to set rules concerning how people use the land: to make stuff, to live on, and to dump their garbage in.

Fine, OK — all of this sounds so commonplace as to hardly be worth mentioning. But, when we start to think about how these issues play out, we find some astounding breaches of logic.

Many smart people have told us that international trade agreements, such as the Trans-Pacific Partnership, or TPP, dangerously erode national sovereignty. Democratic societies have repeatedly chosen to implement regulations deemed necessary to protect health, safety and the environment. Pacts like the TPP seem to be taking these powers away from governments.  I wonder how many citizens in struggling, export-dependent poor countries have any inkling what prerogatives their “sovereign governments” have given away in order to stave off trade sanctions.

But it’s not just the poor countries that are “yielding up their sovereignty” to multinational corporations — oh, no! Lots of people in the Great and Powerful USA are exercised about the increasing ease with which corporations reconfigure their profits into other jurisdictions to avoid paying “their fair share” of US taxes. Have the governed given their consent to that? Perhaps not, but the Emperor, in any case, has made it legal.

If Job #1 of a nation is to administer its territory, what can we say of a country that allows private investors to hold hundreds of thousands of hectares of that territory entirely idle, while its people have no place to make a living? Hasn’t that nation’s sovereignty been seriously degraded?

Furthermore, if a corporation is making “obscene” levels of profit in the United States and then paperworking them into another country to avoid taxes, well — did it not need land, locations and natural resources, to undertake the activities that created those profits? Did it fully compensate the community for the privilege of using that land?

Questions like these have a way of making one’s head swim. They seem to sudden, too sweeping. One is tempted to back-track to see whether some key factor has been left out. That impulse is both understandable and necessary — because in today’s discussions of economic policy a key factor is left out.

So let’s back-track. We’ve said that the most vital task of a nation is the administration of its territory. It defends against invasion, creates and enforces laws, and provides all kinds of infrastructure, both civil and physical. To the extent that nations do these things effectively, they become pleasant and prosperous places to live and do business. And to the extent that they become pleasant and prosperous places, the land in them — most of which is held in fee simple by private interests — increases in value.

land

Any nation that allows fee-simple ownership of land has already — long since — yielded up its sovereignty to private interests. These recent “sovereign giveaways” are just minor embellishments. We can close the barn door if we like, but the horse is long gone.

One of the many things this means is that, while the TPP will exacerbate a number of problems, the solution to those problems is not to be found in protectionism. “Local self-sufficiency” will only make the local landlords a bit less rich.

There was a West African nation that took a series of effective steps to assert its own rightful sovereignty — have you heard of it? It began with a military coup — nothing very noteworthy in that; there are lots of military coups — but this one set out to implement a novel program of reform. The country defaulted on its foreign debt. It proceeded to abolish all income taxes, VATs and tariffs, and to collect the value of land for its public revenue. And what happened? It no longer needed exports, or foreign loans, because its domestic markets were strong, its employment full. The most serious policy problem it had to deal with was the large numbers of people who wanted to immigrate. This country’s name is Alodia — but, alas, it is fictional. So far.

 

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Counting the Zeros: Fighter Jets vs Trains

by Lindy Davies

I once introduced a paper at a conference with the laugh line, “Many of the papers you’ll hear this week make extensive use of mathematics, but mine is a bit different: it makes extensive use of arithmetic.” The economists in the audience knew what I was getting at: minutiae can be examined in fascinating (sometimes Nobel-winning) detail, but often the really important points are made by keeping track of the relevant orders of magnitude — in other words, by counting the zeros.

Here’s an example, to get us started. How many days, months, whatever, does it take for a million seconds to go by? I whipped out my calculator and discovered that a million seconds equals about 11.6 days. Surprised? Well, then, how about a billion seconds? That’s a thousand times longer: 31.7 years. The next one is easier, because we’re sticking with the same unit, but it boggles the mind nevertheless: a trillion seconds equals 31,709 years.

Let’s explore the wonders of zero-counting by comparing and contrasting a couple of lines in the budget of the United States.

Amtrak’s Northeast Corridor Passenger Rail ServiceThe F35 “Lightning” Joint Strike Fighter
— relatively inexpensive; mildly profitable— most expensive weapon in history
— deeply maligned, desperately underfunded— despite criticism, lavishly funded
— used by over 11 million passengers annually— appropriations shared by contractors in 46 states
— ridership increasing as highway congestion worsens— not yet cleared to fly in inclement weather

Dear reader, you can probably see where I’m going with this, but please bear with me: the numbers involved are noteworthy.

owow

The F35 is, in terms of its design parameters, one seriously groovy airplane. It is a “fifth-generation” fighter jet, intended to supersede a number of the fighter jets that are now in use. It is called “joint strike” because the basic plane would be used, with some modifications, by various branches of the military in different missions: fly from carriers for the Navy, take off and land vertically for the Marines, evade radar detection, and locate enemy fighters long before they’re able to locate it. Its pilot will wear a helmet designed to make the plane an extension of his brain; all manner of information will be displayed right before his eyes; next-level optics will allow the pilot to see through the plane as if it were transparent. This is majorly awesome, sci-fi stuff. Lockheed Martin puts it this way:

The supersonic, multi-role F-35 represents a quantum leap in air dominance capability with enhanced lethality and survivability in hostile, anti-access airspace environments…. Missions traditionally performed by specialized aircraft — air-to-air combat, air-to-ground strikes, electronic attack, intelligence, surveillance and reconnaissance — can now be executed by a squadron of F-35s.

However, alas, the F35 is also far behind schedule, and way over budget. “A single Air Force F-35A costs a whopping $148 million.” writes Winslow Wheeler, for the Project on Government Oversight. “One Marine Corps F-35B costs an unbelievable $251 million. A lone Navy F-35C costs a mind-boggling $337 million. Average the three models together, and a ‘generic’ F-35 costs $178 million.” That’s per plane — and, because the F35 is being tested as it is produced, and faulty systems must be retrofitted on planes that are already being flown, the per-plane cost is likely to increase.

The following cost figures for the F35 program were reported by CBS news: $400 billion will be spent to buy 2,400 aircraft — twice as much, in constant dollars, as the Apollo program. To date, the F35 program is $163 billion over budget. It will cost approximately $1.5 trillion over the life of the program. In 2014 we spent approximately $6 billion on the F35.

Maybe you didn’t hear me. I said: twice the cost of the Apollo Program.

Reasonable people can disagree about the urgency of the United States’s need for this airplane. The stated mission is to assert overwhelming superiority, in any aerial combat mission, over any plane the Russians or Chinese might plan to build in the foreseeable future. The US already has a fifth-generation fighter in service, the F22A Raptor — which itself costs some $150 million per unit and, according to the US Air Force, “cannot be matched by any known or projected fighter aircraft.” Only Russia has any plane that is even remotely comparable, and Russia is obviously throwing much less money at the problem than the US is.

Political Engineering

The thing about the F35, though, it that its development and manufacture is distributed with great skill through a multiplicity of key Congressional districts. “Lockheed takes every opportunity to remind politicians that the airplane is manufactured in 46 states and is responsible for more than 125,000 jobs and $16.8 billion in “economic impact” to the US economy….” wrote Adam Ciralsky in Vanity Fair. “Political engineering has foiled any meaningful opposition on Capitol Hill, in the White House, or in the defense establishment.”

To make a long story short: it is virtually certain that — whether we need it, or can afford it, or not — we’re going to have the F35 “Lightning” Joint Strike Fighter. That nickname, by the way, is ironic, because the F35 has not yet been cleared to fly within twenty miles of a thunderstorm.

f35

Fixing Our Trains

Amtrak, the US’s much-maligned passenger rail system, operates 21,300 miles of routes. But, for the purpose of our present comparison, we’ll concentrate on the 471-mile segment that actually turns a profit: the Northeast Corridor. This is the rail service between Washington, DC and Boston, on which Amtrak carried 11.4 million passengers last year. It is only on this route that Amtrak operates its Acela express trains, which can go over 150 mph — they can, at least, on the few sections of track that are in good enough repair. Amtrak owns and maintains these tracks, which are also used by commuter-rail systems in DC, Baltimore, Philadelphia, New York and Boston — and some of them have gotten quite rickety over the years.

To pick one of many examples, the Portal Bridge over the Hackensack River in New Jersey is 100 years old and carries 450 trains a day — if things stay on schedule. The old swinging drawbridge causes many delays. It would cost $900 million to replace it with fixed bridge. Republicans have harshly criticized Amtrak for many years — and they can’t all be wrong; it’s likely that there is some significant degree of inefficiency and inertia in Amtrak’s program. The House of Representatives recently voted to cut Amtrak funding for the coming year to the tune of one and two-thirds F35s ($260 million) — the very day after a deadly derailment outside of Philadelphia.

This seemed an exceptionally spiteful move, even for Congress. This particular accident was probably caused by human error. But it could have been prevented, had a “Positive Train Control” system been in place; a 2008 law requires it to be implemented by the end of this year. Such systems are routinely used across Europe. Amtrak, however, is strapped for funds. Its “Vision Statement for the Northeast Corridor” laments:

In the New York vicinity, some areas are operating at 100% capacity, resulting in significant delays from even minor operating disturbances. The [Northeast Corridor] consists of a mix of aging infrastructure, much of it built 80-150 years ago, that will require extensive repair for safe and efficient operations at current traffic levels.

Folks, that’s like commuting to work every day at 70 mph. in an old VW beetle that only goes that fast (and has a tendency to overheat). Nothing against the beetle, but — how long could you count on that?

 

late

Reasonable people can disagree about the efficacy of subsidized passenger rail service in the megalopolis between DC and Boston. I don’t think anyone disputes, however, that the highways in that region are getting more congested all the time, and that reliable, reasonably-priced intercity rail service wouldn’t be a bad thing. But, can we trust Amtrak to provide that? Not according to Rep. John Mica (R-FL), who said this on the day of the budget vote: “The problem is you give Amtrak the money and they blow the improvements or squander it. Congress does not trust Amtrak. They’ve given them the money before.” Mica’s largest campaign contributor is the air travel industry.

Let’s talk numbers

Amtrak’s overall operation was $329 million in the red for 2014, but its Northeast Corridor service made a profit of $286 million. You heard that right: that means that the 20,829 miles of non-NEC Amtrak routes are subsidized by over half a billion dollars a year! That’s fully ten percent of what we spend annually on the F35 “Lightning” Joint Strike Fighter! (And, it’s eight percent of what the British government spends annually on passenger rail.)

Amtrak’s “Vision for the Northeast Corridor,” offers various proposals for improving service and reliability, which are echoed in somewhat greater detail in a report by the by the Federal Railroad Administration. The proposals are graded, A through D, in escalating wish-lists. The ones in section A amount to simply maintaining existing capacity (which nevertheless calls for some rather expensive catching up). The suggestions in section D, though, are the stuff of Republican apoplexy; they propose to:

transform the role of rail, so that the rail system would accommodate a significantly higher percentage of travelers and passengers, enabling new travel patterns and new markets to be served… positioning rail as a dominant mode. This would be accomplished through a major increase in the capacity of the NEC along its entire length, service to new markets, and a dramatic reduction in trip times.

What the heck, you might as well ask for what you want. This dramatic vision (including such luxuries as replacing the Portal Bridge in Hackensack), this pie-in-the-sky wish list, way more than Congress would ever appropriate, this tremendous infrastructure enhancement that would make life so much more efficient and convenient in the Northeast (not to mention conferring significant environmental benefits) — this commie-liberal subsidized rail boondoggle — would be gradually implemented between now and 2040, at a projected cost of $151 billion. That would amount to about $6 billion per year. Does that figure sound familiar? It’s the amount that we spent in 2014 on the F35 “Lightning” Joint Strike Fighter.

To reiterate: the total projected cost of the most ambitious plan for a long-term upgrade of Northeast Corridor Rail infrastructure is $151 billion. The amount by which the F35 program is over budget, so far, is $163 billion. It really helps to count the zeros.

Two P. S.’s

1) It is widely known by economists and smart people everywhere that quality public transportation facilities increase real estate values. The city of London has capitalized on this obvious fact to fund rail improvements with levies on the windfall gains that the railroads have created. In Florida, a private concern, Florida East Coast Industries, has bought up lots of land around the terminals of a passenger rail service it plans to introduce between Miami and Orlando. Indeed, this is exactly the way the transcontinental railroads in the US were financed. Financing passenger rail improvements with taxes on land values is an easy, sensible and fair policy; we should start doing it immediately!

2) By the way: If you really want to get your mind boggled, you gotta check out Wikipedia’s page on Orders of Magnitude!

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