Economic Facts I Don’t Like to Know

I’ve just finished reading an unpleasant book, The Myth of the Rational Voter, by Bryan Caplan (see photo), whom I don’t want to know. A more cantankerous author I’ve not encountered in decades – especially among academic writers. He’s an economist and on every page he vents his antagonism toward his opponents, who apparently include almost everyone alive, apart from most other economists.

Yet I kept reading, intrigued even while I was offended. He adduced good evidence for his obnoxious views, so I couldn’t dismiss his empirical findings, though it was easy to dismiss his snide passing remarks on many other subjects. I hoped he’d find a silver lining in all these gloomy studies, but in the end his proposed solutions fall far short of the mark. Nevertheless, he made me want some good answers, and I’m thinking hard now about how to solve the predicament that he has persuaded me to recognize.

The book’s subtitle gives away the plot: “Why Democracies Choose Bad Policies.” It lambastes democracy and claims that most voters are irrational in their choice of political and economic policies – even those voters who are canny and shrewd when handling their own financial interests.

I don’t automatically agree that democracies choose bad policies. It seems that one or two autocracies in history have made bad decisions too. I am almost what Caplan calls a “democratic fundamentalist” — a term that he coins as a counterpart to “market fundamentalists,” i.e. those who strongly favor unregulated markets. My preference for democracy is not based on economics but the preference for peace. Democratic countries virtually never go to war against other well-established democratic countries. Democratic regimes also perpetrate very little democide against their own people, as compared to dictatorships. That’s a sufficient basis for lauding democracy, and I do. Nevertheless, I’m appalled by some of the horrible decisions that are made by voters in democratic countries, notably one whose name I shall not type here, with the initials U and S. The whole world is in big trouble now, largely because of the foolish policies of that country’s elected government. Why are voters so irrational?

Caplan’s main opponent is the commonplace opinion that people vote in ways that rationally favor their own self-interests. He claims that you will get in trouble if you contradict this orthodox assumption. Yet, using a whole whack of evidence, he shows that, however axiomatic, it is untrue. People vote instead for what they think will be good for society. The trouble is, most of them are ignorant or worse than ignorant; they have mistaken beliefs that they will not surrender even when disproved. Caplan sounds like a weary economics professor at the end of term, having repeatedly failed to pierce the pre-determined convictions of his students. Yet I am encouraged by his finding that people are not typically selfish in their voting. In fact, he claims that it is the educated voters and professional economists who especially protect the interests of the poor, for they don’t protect their own interests.

(There is one exception to the rule that voters don’t protect their self-interests, and that involves the issue of smoking. Smokers and non-smokers differ drastically in their policies, with smokers defending their rights vigorously against regulations that non-smokers endorse.)

If people don’t usually vote for their self-interest, they do have strong cognitive preferences that distort their opinions in regrettable ways. They cling to certain beliefs for dear life, though economists have produced consistent evidence that these are wrong. But Caplan acknowledges that not everyone is economically illiterate, since educated people tend to agree with Ph.D. economists.

And it’s a mistake to assume that economists are conservative. They tend to be liberal. But they are like-minded on a few issues that set them apart from the “economically illiterate.” Caplan identifies four “families of beliefs” that these ignorant people tend to share: an anti-market bias, an anti-foreign bias, a make-work bias, and a pessimistic bias.

The anti-market bias he defines as a “tendency to underestimate the economic benefits of the market mechanism.” I certainly do see this bias among my friends, almost all of whom are exceedingly suspicious about commerce — though not for the reasons that Caplan assumes. I think most of them acknowledge (if pressed) that capitalism has raised the living standards and life expectancy of the human population beyond anything imaginable even one generation ago. Even so, they don’t like its psychological, and cultural, and environmental side effects. In fact, they dislike materialism so much that they would gladly do away with markets. I suspect that within a year, they’d want them back, but they can’t see the benefits at the moment.

I do. I would not want to give up the conveniences and comforts of my affluent lifestyle, which depends so heavily on the market system. And I’d certainly not want to condemn the less-developed countries to perpetual poverty by the impetuous, self-righteous politics of hating commerce.

The other so-called biases are also familiar to me, though the anti-foreign one is less so. The whole constellation of biases leads to a support for protectionism and opposition to free trade, especially international trade. Certainly the make-workbias is familiar: a business deal is considered good if it creates jobs, whereas any move that improves productivity by eliminating work is considered bad for the economy. Definitely these views are forms of “economic illiteracy” that have often hampered economic development.

I could add one to his list: the idea indeed that economic development is bad because it involves growth. I suppose he hasn’t even come across that one, but I see it a lot these days, especially because people are more aware of pollution and deforestation, which they regard as the inevitable consequence of economic growth. That issue is a particularly serious obstacle that impedes the development of policies that are necessary to solve our current crisis.

Caplan doesn’t have any promising solutions to the bleakness he described. He knows it isn't acceptable (thank God!) to make voters pass tests in economics before they are allowed into a polling booth. Knowing that it’s an undemocratic idea, he proposes a variation— that educated individuals be given extra votes somehow. But, knowing this will be seen as unfair, he doesn’t press it.

He does want to introduce curriculum changes, so that people should be encouraged to take economics instead of reading the classics. I don’t think that will fly either, but it’s getting closer to acceptability. He recommends against get-out-the-vote campaigns during elections, since those who don’t vote are usually the most economically illiterate, so probably they are doing us a favor by not turning out.

The one explanation that intrigued me was only a sentence that he wrote in passing. He had shown that people are more irrational about voting than about making their own individual economic transactions. Then he says: “Democracy is a commons, not a market. Individual voters do not ‘buy’ policies with votes. Rather they toss their vote into a big common pool. The social outcome depends on the pool’s average content. In common-pool situations, economists usually fear the worst.”

Now this is persuasive. I was writing a few weeks ago about the problem of depleting resources, generally caused by the “mining” of a common pool of resources. Deforestation, the depletion of fisheries, and so on. If the common could be broken into discrete units that can be bought and sold, the individual owners would benefit personally from their conservation efforts.

This reminded me of an old idea of mine: weighted voting. Suppose voters could “spend” their votes on items that they cared about, at the price of not voting on other issues that are not important to them. This would give each person a greater chance of making a difference on salient issues. It ought to motivate voters more, since their votes would not always be aggregated in common pools with the whole electorate.

On the other hand, I’m not sure it would bring out the educated, well-informed voters more than any others. And I’m not sure it would provide any new instructional opportunities to overcome the biases that make democracies reach bad policies. Probably American voters would still have supported the war in Iraq.

So what’s the solution to that? Caplan doesn’t have one, nor do I.

Taming the Corporation

Yesterday I interviewed Rabbi Michael Lerner (see photo), founder of the Network of Spiritual Progressives. I’ll publish it in the October issue of Peace Magazine. One of his suggestions pertained to the harmful effects of corporate capitalism. The Network’s platform includes an amendment to the US constitution that would require big ones to be socially responsible. This change would require all corporations with an income over $50 million to renew their charter every ten years, subject to approval by a jury of ordinary citizens who would appraise the social responsibility of their previous record.

Not bad. I had suggested an alternative proposal myself: that every large corporation be required to appoint people to their board of directors drawn from panels chosen by a variety of stakeholders: environmental groups, their customers, their employees, and from other civil society organizations. Lerner claimed that these directors would be outvoted by directors representing the interests of stockholders.

Okay, I’d be satisfied with his approach – assuming that these juries would be open to lobbying by civil society organizations. Maybe his way is better. As he admits, this would not be a revolutionary change; it’s still not socialism. But then, I am not a socialist anyway. I see more good than bad in the effects of capitalism in the world. Yes, it encourages a crass materialism, but it does raise the standard of living wherever it is established, extending life expectancy, health, educational levels, and comfort. I think it’s pretty arrogant of people who have enough to curtail processes that are meeting the material needs of those in the world who live on $1 or $2 per day.

On the other hand, Lerner and my Leftist friends are right that corporations sometimes actually endanger the lives and well-being of people far beyond our borders. Some additional measures need to be developed to protect them, and generally to protect the environment and the allocation of resources to beneficial purposes. The Network’s proposal is a good approach, but there are others as well.

Last night I watched a fascinating TV show about a Canadian gold mining company that is beginning to destroy a village in a gorgeous mountainous region of Romania. The town has been on the skids for quite a while, with quite high unemployment, but it remains quaintly charming. The townspeople seem divided as to whether to accept the company’s offers to buy their houses to destroy them. Apparently if one single family holds out, they cannot be forced to leave and therefore the company will be unable to continue.

Gold has been mined in the area since Roman times, and there are miles of tunnels under the mountain which the Romans had dug and which remain a remarkable archaeological site. The current technology requires the use of cyanide, which would be poured into the valley to make a poisonous lake. To show the worst possible outcome of this, the documentary showed a spill elsewhere a decade or so ago when all fish and wildlife were poisoned by the cyanide, which then flowed on toward the Danube.

Despite the legal problems that remain unresolved, the mining company must feel that the project will be approved, for they are already destroying homes. Some of the former residents are happy about the opulent new houses they have been able to buy abroad, but others grieve and plan to have the graves of their dead relatives moved.

Yet the mining company could put on a pretty persuasive demonstration, claiming that the community would be more prosperous and even prettier than before. This is to be the largest gold mine in Europe and will gouge out a whole mountainside into stair-stepped layers of bulldozers. It’s hard to imagine that it won’t be left in ruins after the 17-year mining project. If they’d said it would last 100 years, the prosperity might seem attractive, but seventeen years is not long.

Now there are fights within families. Some will go, others will stay on and try to protect their community. I would stay on, I think. Actually, I would not want to live there at all, most likely, since I would be bored silly living in a rural area, but the place does have a charm that I would hate to see destroyed.

Is this a threat to the villagers’ “human rights”? I’m not sure, but I’ve been reading a Stratfor piece about a policy under development by the International Financial Corporation and the UN’s top expert on the relations between business and human rights. Harvard Professor John Ruggie. Kofi Annan had appointed Ruggie to assess the existing status of rules, norms, codes of conduct, and informal agreements on corporate responsibility regarding human rights and to recommend a clear set of rules.

As while back, the UN had already tried to develop ways of managing globalization in a positive way. In 2003 it developed a document called the “UN Norms,” which called for corporations to be considered nearly as responsible as states for the protection of human rights. However, many were dissatisfied with this. Some governments in particular did not like to have to lose jurisdictional ground to corporations, whereas corporations sometimes disliked having to become responsible for ensuring human rights in places where they lack control over the actions of governments.

Ruggie’s proposals have not been announced yet but it appears that he will change the balance again. He will say that governments are responsible for policing human rights abuses and curtailing the plans of corporations that seem harmful to human rights. According to Stratfor, this is actually a good move, since sometimes despotic leaders like to claim that they are powerless to stop corporate abuses, and these new international rules will call their bluff.

Stratfor claims that corporations cannot do as much damages as they would otherwise have done because human rights campaigners are on their cases and would raise a public outcry if, for example, the corporation took water that is needed by a local population during a drought. I don’t know whether that is true, but it’s encouraging to believe. To be sure, there is quite a growing movement to hold corporations accountable to stockholders. A week ago, the New York Times Magazine featured a story about a nun who goes to annual general meetings of Exxon, General Motors, and other big corporations and demands changes from the management. So far, Exxon has refused her demands for them to acknowledge and reform their plans regarding climate change.

So I am not convinced that Professor Ruggie’s proposals will have any teeth. He seems to think that his report’s rules will evolve into international norms, but I think enforcement mechanisms are required. So this is where Michael Lerner’s ideas could be useful. Give the juries these new standards of conduct and ask them to uphold them rigorously, withholding a corporation’s charter if it fails to comply.

What are the odds of this? Pretty damn low right now. But when the crunch occurs, public opinion may change and make it possible. There's hope.

Cheap Oil and Cheap Food

I just watched Charlie Rose interview Thomas Friedman on TV. (It was almost entirely a one-way conversation; Friedman talked a mile-a-minute and kept saying “let me finish....” and because he was so interesting, Rose didn’t interrupt him at all.)

One interesting point caught my attention. He reminded me that the reason the USSR fell apart was that oil was selling at $10 per barrel. (I remember using that to excuse poor Gorbachev's failure, since I loved that peaceful man a lot.) Then Friedman amended that explanation by saying that it was really because it had been selling at $80 a barrel, so the government was spending money like crazy, and then it fell to $10 a barrel. They were over-extended and the Soviet citizens were shocked that the good times suddenly ended.

This was said in the context of his comments about bringing democracy to the Middle East. Everyone knows that democratic opposition movements haven’t a chance of bringing down the Islamic dictatorships so long as the price of oil stays high – but if it can be brought down, then that’s another matter. Some democratic reforms might be possible.

So we want “cheap oil”? I don’t think so. Or at least I had to stop and reorganize my thoughts on the subject. I’d actually read Friedman on this subject before, but the dissonance hadn’t made me stop to wonder at that time. I assume that what we have to do is raise the price of oil enough to force people to cut fuel consumption drastically. That didn’t fit with Friedman’s comments about driving down the price of oil in the Middle East.

In fact, it didn’t even fit with another of Friedman’s big positions: that most politicians are scared to do what is most needed: tax gasoline heavily. Here he is arguing in favor of raising the price at the pump, for reasons that are perfectly clear to me.

So I had to reconcile the two notions: price at my Esso pump versus price at the wellhead in Iran, say, or Saudi Arabia. The difference is clear; Friedman’s ideal situation would be cheap oil made expensive to consumers by the imposition of steep taxes. He is appalled that no one in Congress will dare to propose such taxes. He didn’t speculate, but one could argue that if hefty taxes were slapped onto gasoline, drivers would reduce their consumption enough to bring down the price at the wellhead and make the Islamic dictators less popular at home.

Anyway, I see now how I had been mistaken. When oil is cheap in one place, it could be expensive in another place, depending on the level of taxation.

And as I switched off the TV and turned to an article from the Worldwatch Institute, I got another surprise. This piece was arguing that the current high price of biofuels may actually benefit many of the world’s rural poor. Everything I had previously read had suggested the opposite: that high fuel prices spelled trouble for the Third World. Farmers couldn't afford fertilizer and other supplies, and the urban poor couldn't afford high priced food products. So how could the Worldwatch fellows see any of this as beneficial?

The Worldwatch article began explaining this contradiction by mentioning the role of biofuels such as ethanol. Again I was surprised. Most of the articles that I read these days say that biofuels offer no solutions to our problems; they induce people to shift away from producing much-needed food. Besides, the net energy of most ethanol is too low to be useful. So why should Worldwatch be celebrating the rise of biofuels in the Third World?

Answer: the price of agricultural products have been declining for decades, but now with the demand for biofuels, farm commodities are fetching higher prices. Christopher Flavin, Worldwatch president, said:

“Farmers in some of the poorest nations have been decimated by US and European subsidies to crops such as corn, cotton, and sugar. Today’s higher prices may allow them to sell their crops at a decent price, but major agriculture reforms and infrastructure development will be needed to ensure that the increase benefits go to the world’s 800 million undernourished people, most of whom live in rural areas.”

Citing the Institute’s new book, Biofuels for Transport, Global Potential and Implications for Energy and Agriculture, the article admits that high food prices will create problems for some urban poor. The answer is to direct more relief efforts to them, since the real cause of hunger is poverty (lack of money), not shortage of food. “Driving agricultural prices ever lower will hurt more people than it helps,” they insist.

“Growth in biofuels production may have unexpected economic benefits, according to the experts who contributed to the report. Of the 47 poorest countries, 38 are net importers of oil and 25 import all of their oil; for these nations, the tripling in oil prices has been an economic disaster. But nations that develop domestic biofuels industries will be able to purchase fuel from their own farmers rather than spending scarce foreign exchange on imported oil.”

Okay, that makes some sense. It seems paradoxical, but — hey, I’m no economist, so how should I know?

The Worldwatch writers do acknowledge the alternative, more familiar perspective, pointing out that the real advantage will come from using degraded land for biofuels made from switchgrass and other non-food sources of cellulose. They even argue for developing social and environmental certification and a credible system to certify compliance.

I hadn’t heard those proposals elsewhere and they seem promising. After all, if the diamond industry could create the Kimberley process to keep African dictators from selling blood diamonds, it should be possible to monitor ethanol’s sources and the revenue it generates. So, although I remain slightly skeptical about the overall argument, I can see that it may be right.

Several months ago I posted another blog entry that was favorable to biofuels. I was reporting on Ted Turner’s appeal to the WTO negotiators to reduce agricultural protectionism by the richer countries for the sake of keeping the Doha round from failing.

His reasoning was quite different from the Worldwatch argument that I’ve just mentioned. Turner was addressing the political pressures that Western farmers exert on their governments to retain protectionist measures. He argued that ethanol production (presumably from corn, though he did mention the coming of cellulosic ethanol) would give Western farmers a good income for the first time in many years. Their prices have been declining for decades too. And with the boost given them by the demand for ethanol, these farmers will be less desperate, hence perhaps more amenable to the reduction in agricultural subsidies to which they have become accustomed. This could save Doha, Turner believed, and with it the future well-being of farmers in the less developed countries (see photo).

My friends jumped all over me for accepting this argument. In fact, there was no breakthrough in the Doha round, which I might be officially dead by now. However, that seems not to be the case; the president of WTO is continuing even now to urge it onward and I wish him well. Most of my friends who know their way around the energy issue claim that biofuels are doing more harm than good, but they are not thinking about cellulosic ethanol. Nor, for that matter, about the potential use of algae. Apparently those little green cells grow like crazy, soaking up huge amounts of CO2, and yielding fuel that can extend if not even supplant the use of gasoline.

In the meantime, I’ll keep my mind open and cheer whenever one of these technologies proves itself.

Getting Old

I used to believe that people didn’t change when they got older — they just got more like themselves. They became caricatures of themselves. Whatever qualities were prominent before became increasingly exaggerated until one’s personality became distorted, even more than one’s face. Today I’m not so sure.

I got my new US passport in the mail today. Nowadays Uncle Sam issues new passports every ten years, so the photographs leave a perfect records. I am definitely ten years older. My hair is thinner. My eyes are small, beady. I look a bit sad. They used to let you smile but now you have to suppress any expression, so what is left for me looks rather melancholy. But I’m not a caricature of my former self.

I also did a test of my own fitness today. I have bought a heart rate monitor watch so I can start doing intense exercise in a graduated way. Obviously, at almost 76 years, I have a way to go before I can be in the right range. When exercising moderately for one minute, my heart rate went up to 108. Then after one minute’s rest it went down to 95, initially. I kept doing this five times. Then I calculated my recovery rate, which was 90. That’s not good, and it’s what counts. The recovery rate, which you calculate after the heart has slowed down, was way too high. It should drop 30 points to be okay but it only dropped 13 points. That’s why I have to get to work on intense exercise and bring it down before it brings me down.

It’s the best indicator of probability of heart attack. I haven’t been exercising properly for a while and now I know I have to do it differently. But I’m not just the same as I ever was, only more so. I’m different now. Age will do that to a person.

What about my friends? As they the same or different? The answer differs, for they don’t all age the same way. I’m less close to some friends now because we are becoming more dissimilar. I thought we would just get closer — that after 30 or 40 years, nothing would diminish in a friendship; you’d just get closer. But that’s not necessarily true. One friend seems to be losing ground in ways that trouble me. She has nothing interesting to say and seems shallow. Old age should certainly deepen one, not make us childish. One must not seem to notice such things. After all, what good would it do to mention it? She can't help it. I don't suppose she realizes it.

Another woman friend retired a few years ago from a full career as an academic administrator and decided deliberately not to take up any new interests. She is just going to vegetate. That would be the most horrible life pattern I could imagine – just going to seed – but she is consciously choosing it. She and her husband garden and keep pets. It is getting harder to talk to her, though she still is healthy and beautiful.

A white haired female friend ten years younger than me still does have interesting things to say, but she feels distant from me and that may not be fixable. She is still highly active professionally and travels a lot, which I can no longer do. Nor do I want to travel. I once hurt her, long ago, and it has not healed between us. Can everything heal? I hadn’t intended to hurt her at that time but that’s how she saw things at the time and would not be placated. One day we will talk about it. In the meantime, though, there are arguments about intellectual issues when we get together. They are not really about the issues, but about old hurt feelings, but actually I don’t mind arguing with her because she’s more interesting than my other women friends who have nothing to say except to recount the doings of family and friends.

On the other hand, I have another white haired woman friend, just my age, who remained single all her life and teaches meditation professionally, since giving up her academic life. She’s still active, but her eyesight is so poor that she cannot read. That has to be a handicap when it comes to pursuing new interests.

So often, interests seem to shrink, especially in people who never were very engaged in the affairs of the world anyway. Lots of women constrict their affiliations, becoming more self-absorbed, or focusing on family and losing interest in theoretical problems or public issues.

I know of only two good marriages among my old friends. I think they are good because neither partner will analyze the other. Marriage is hard, to be sure, whether one is young or old.

No, there are other good marriages, now that I search my memory. In some cases, I don’t know how the pairs function together because I usually see them alone. I'm thinking now of another good one in which I only know the husband. In all of our 19-year friendship, he has never introduced me to his wife. Very odd, but maybe that's how they keep their marriage going well. He says she doesn’t like meeting people, so he just lets her be that way and has friends of his own separately. I refer to her sometimes as Mrs. Columbo, after the TV detective (see photo) who often referred to his wife, though no one ever saw her.

I saw Peter Falk, who played Columbo, in a film a while back. He was old, but still sweet. That's rare. Not many of us are sweet in old age. I guess if you knew how to be sweet when young (I did not) you don't forget in old age. Like riding a bike -- which I also never learned to do.

Another friend always seemed to have a good marriage, but now I wonder. She has retired recently and is putting aside her previous interests and memberships, letting him decide what to do with the rest of their lives. She’s doing that quite consciously. I don’t know what to make of it. I wouldn’t be able to do so myself, however wonderful my husband might have been. (He wasn't.) In her case, she will be giving up a full life of her own, just to cooperate with his desires.

This style of writing used to be called "stream of consciousness." I wonder what they call it these days.

How Much is Enough?

A dear friend asked me to read a paper she’s been working on and give her my reactions. That’s been my project today, but it’s a bit unsettling because I cannot wholeheartedly praise the paper, nor can I formulate a constructive suggestion for improving it.

Her argument is that people living in contemporary capitalist societies have become morally compromised by the marketing orientation. Not only are we inordinately concerned about buying and selling but we regard ourselves and others as commodities to be branded and favorably advertised in order to achieve success.

Well, yes, that does happen — but to certain people more than others. My friend’s paper is depressing because it implies that the market runs everyone’s life, ineluctably so. Nor does she propose any solution. We are doomed to become less human every day, so long as we live in a society where almost all economic interactions are strictly commercial, rather than based on unmeasured reciprocity or altruism.

This is not a new argument, but is almost a normal background assumption within leftist discourse. Unfortunately, even leftists no longer have any notion what to put in place of capitalism, so the only future they can envision is a soulless, materialistic one where accomplishment consists only of commanding a high price on the market of humankind. I would feel depressed if I did not recall the message of my old professor, Herbert Blumer(see photo): People are not just driven by automatic,stimulus-response reactions. There is interpretation going on.

Nor are we just blindly driven by our culture, or by the advertising we see around us. We can think. Hallelujah – we can think! We interpret the nature of the stimuli around us, and may even check our own reactions to them. It is possible to live and work in a market-oriented society without losing one’s sense of proportion if one stops to think.

That’s reassuring since we’re not going to do away with the market, nor would I want to do so. It’s an essential way of allocating goods and resources according to the priorities of individual buyers. Even socialists recognize its usefulness these days. The question is, how do we live within a commercial system without losing our bearings? My friend does not attempt to answer that question.

And, indeed, it is a problem for everyone, since the market requires us to make relative comparisons, and when we start doing so, we adopt a logic with no inherent limits. When shopping we will naturally choose the comparatively best products that we can afford. The logic of shopping does not encourage anyone to choose items that are "good enough" without comparing them to the other items on offer. There is a strong tendency to carry such comparative methods of appraisal into other spheres of life, so that everything becomes invidious and everything is measured by its market value. The market value is always the aggregated appraisal of other people. I do know people who want to build up their “market value” so they can feel good about themselves. David Riesman would have called them "other-directed” contrasting them to “inner directed” people who don't get their values from others.

The moral challenge is to use the marketing logic when it’s appropriate (which it often is) but retain some other grounds for appraising value as well. That means having some internal standards of value, rather than by making relative comparisons. For example, your body will inform you whether you are physically comfortable — whether you have enough. That’s a good criterion.

And as for judging one’s own success or failure, this requires one to know his own goals — which cannot be acquired properly by making comparisons. If you don’t have a sense of vocation, you can’t get it by looking around you at the purposes of others. And if you do have a sense of vocation, you won’t care what the others around you are accomplishing — it’s only your own calling that will matter.

Tonight I watched a video of Thomas Friedman giving a talk about his “flat world” theory to a public audience. He shows that the internet and electronic communications have created a platform enabling educated people all around the world to participate in the global economy and the global culture. India and China will catch up with the West — which he will certainly celebrate. We will have to get smart in order to lead in this new flattened world.

So a chap in the audience said he'd been traveling and saw people in Thailand who smiled a lot but owned very little. He wondered whether they might be happier than we are, with our computers and televisions. Joseph Stiglitz was on the panel too and he answered the fellow by saying that most people in the world live on less than $2 per day. It's pretty hard to be happy when you're that poor. Friedman too said that his promotion of this flat world is based on a moral concern for human well-being. Computers are making opportunities for people to overcome poverty.

I agree with Stiglitz and Friedman -- but only up to a certain point. There is research showing that money does make people happier -- but within limits. After you have your basic needs met, more money won't make you happier. Nor will it make you less happy. Much depends on what you do, given the amount of money you have. Up to some $10,000 per person per year, more money does help. Above that, maybe not. After your basic needs are met, after you have enough, then you have to know what to do with yourself. And that is a totally different set of challenges.

So I am not worried about living in a materialistic, market-oriented world. I have enough and I'm not looking for more, even if I can afford it. Other people can think too, thank goodness. Thank you, Herbert Blumer!

A Technophiliac Klutz

Don’t try to tell me how anything works. It won’t sink in. It takes me ages to learn how to operate any technical gadgetry (including “Minnie,” my Apple Mini computer) and even so I can’t understand the theory behind it. I’m a klutz, but not a technophobe. Indeed, I have immense respect for technology. Hats off to Mr. Goodwrench and the Maytag Repairman!

Oddly, my enthusiasm puts me into an underpopulated category, for most of my friends regard technology as inimical to civilized living. To be sure, they use it, but they fear it. Mostly they expect Hal the Robot to take us over, and fear that if we don’t watch out we’ll lose our feelings for humankind and nature. They believe that the only way to prevent that, and to protect our planet from devastation by technology, is to cut back on our use of natural resources and revert to a simpler, even rural, way of life. I’ve made it my mission to combat that perspective, for I say that climate change and ecological sustainability require us to foster technological innovation as if our lives depended on it — which they do.

Question: How has humankind managed to multiply six times over since the Industrial Revolution, while raising our standard of living and life expectancy, and making raw materials more abundant instead of increasingly scarce?

Answer: By inventing more efficient technologies using alternative materials. But only when the population grows do such innovations enter the picture. Without population pressure, we’d never change. Societies are culturally conservative; they don’t change until forced to do so. The “Population Boom” that began after World War II has been a great blessing.

The tons of new innovations coming along prove my point. So don’t run off to the woods, Scaredy Cat! Our life style is going to be marvelous right here in our cities, thanks to the guys who used to be called “Slide Rule Boys.” (What do they call them now? “BlackBerry Boys”?) I’m immensely grateful to be alive at this thrilling period of history, when the challenges are urgent and new answers are coming at us every day, pell mell. Let me mention just two of today’s breakthroughs.

From Tacoma, Maryland there’s a new report about energy, “Carbon-Free and Nuclear-Free: A Roadmap for U.S. Energy Policy.” Its subtitle says “Protecting Climate Will Require Essentially Complete Elimination of U.S, Carbon Dioxide Emissions by 2050.”

Sounds right to me. But can it be done? Yes, says the report’s author, Dr. Arjun Makhijani, who heads the Institute for Energy and Environmental Research. He thinks “it won’t cost an arm and a leg to eliminate both CO2 emissions and nuclear power.”

Better yet, for all us materialistic types who don’t want to reduce our standard of living, Makhijani’s “Roadmap” concludes that the United States

“can achieve a zero-growth CO2 economy without increasing the fraction of Gross Domestic Product devoted to lighting, heating, cooling, transportation, and all the other things for which we use energy. The fraction was about 8 percent in 2005. Net U.S. oil imports can be eliminated in about 25 years or less.…

“North Dakota, Texas, Kansas, South Dakota, Montana, and Nebraska each have wind energy potential greater than the electricity produced by all 103 U.S. commercial nuclear power plants. Solar energy is even more abundant — solar cells installed on rooftops and over parking lots can provide most of the U.S. electricity supply. Recent advances in lithium-ion batteries are likely to make plug-in hybrid cars economical in the next few years.

“Plug-in hybrids should become the standard-issue car for governments and corporations in the next five years. That demand will make prices come down to the point that it can become the standard car design in the next decade…

“The study recommends an elimination of subsidies for nuclear power and fossil fuels, and also for biofuels like ethanol when they are made from food crops. …

“The study recommends a ‘hard cap’ on CO2 emissions by large fuel users [that] would be reduced each year until it reaches zero in 30 to 50 years. There would be no free emissions allowances, no international trade of allowances, and no offsets that would allow corporations to emit CO2 by investing in outside projects to reduce emissions….”

Copies of the 23-page executive summary are available. The full report will come out later and be published as a book by RDR Books this fall.

Excellent! How reassuring! The only remaining question in my mind comes from early in the introduction to the report, which refers to the recommendation by the European Union to cut greenhouse gases sufficiently to limit global temperature rise to about 4 degrees Fahrenheit. I understand that we have to keep the increase to less than two degrees. Four would be far too much. But perhaps it’s a difference in scale that explains the discrepancy. Does it equal two degrees Celsius or what? Would an increase of global temperature 2 degrees Celsius equal 4 degrees Fahrenheit. I should be able to figure that out but, as I admitted, it’s far too hard a problem for us technological klutzes to solve.

Moving on, we come to the most interesting article in today’s Globe and Mail: a story about a British Columbia family who are building a cob house. (See photo for example of cob construction.)

Now this is a kind of technology that may even appeal to my friends, for it is not a new innovation at all, but a return to an ancient method of construction – with dirt. The builders mix clay with straw and pumice, using a rototiller to stir it efficiently, then form it into thick walls, covered with plaster on both sides. This vastly reduces the need for wood. The particular house now under construction will also have dirt floors heated by solar-warmed pipes.

(As a girl in Oklahoma I once visited a child whose family limited in a shack with a dirt floor. It wasn’t a pretty sight, so it’s hard for me to imagine having a luxurious house built for myself with dirt floors and walls, but that news item has forced my mind open a little wider.)

The importance of this story is not mainly esthetic. It bears upon an issue that I’ve been debating with my friend Derek Paul, who hosted a conference on forestry recently that predicted, by means of a mathematical model, that we’d run out of wood in a specific time period (I don’t remember when). My point was that no mathematical model can predict when some innovation will come along that completely changes the demand for any product, including wood. So here we are – with an innovation that may handle the shortage very neatly. I don’t know what percentage of all wood harvested goes into house construction, but it must be significant.

Moreover another significant portion of wood is used for paper, which again may be about to undergo some dramatic changes. Newspapers everywhere are losing readers. Most people get their news from the Internet or from television. If this continues a large amount of wood will not be made into paper, as Derek’s model probably assumed.

And book sales are another area that may change dramatically. So far I have not even considered buying one of those newfangled screens the size of a book that hold up to 500 books. I’ve heard that most people don’t like them as well as paperback books. But surely that technology is going to develop. I look forward to carrying a whole library in my purse, including the Sunday New York Times. And perhaps today’s Wall Street Journal, which was sold only yesterday to Rupert Murdoch in the hope that its possession of Dow Jones will enable the paper to survive. I won’t be reading the reports of my own investments, but intend to follow assiduously the stories about technological innovations and economic changes.