The Tragedy of the Oceans

June 10, 2009 at 11:56 am (By Maxwell James)

The noise produced by the global warming debate often overwhelms other environmental issues. I find this unfortunate, because some of these issues matter a great deal and are arguably equally urgent, if in a quieter way. For example, take fish.

There is little doubt at this point that overfishing is greatly impacting the quantity of fish in our oceans, particularly those fish that people actually like to eat.  Farmed fish are a long way from being a solution to this problem, being quite inefficient to produce and a source of pollution themselves. They are also arguably unethical to produce, for many of the same reasons as factory-farmed chickens. Once basically a free good, fish in high-development areas have also become prohibitively expensive

In this article, the cookbook author Mark Bittman (who incidentally writes and edits a good and generally fun food blog, Bitten), ruminates sadly on the great difficulty of buying “sustainable” fish. His approach boils down to buying fish very carefully, and eating it a good deal less than he used to.  Which has implications he does not address: fish is one of the only reliable sources of the essential fatty acids DHA and EPA, which are crucial for brain development and heart health. As go the fish, so do we.

~ Maxwell

UPDATE: Maybe I should cheer up a bit. Ray Hilborn offers some context.

UPDATE: Regarding amba’s question in the comments: I found it striking that both Hilborn and the activists referred to the same source for their statistics, the United Nations’ Food and Agriculture Organization. The following graphic is from page 51 of the UNFAO’s The State of World Fisheries and Aquaculture 2008.

fisheries chart

So the actual picture here is more complex than either the professor or the activists claim. On the one hand, overexploited/depleted/recovering marine stocks seem to have plateaued at 25%, at least for now. But underexploited stocks are on a fairly rapid decline, while fully exploited stocks have hovered around 50% for thirty five years.

So I guess the picture right now seems less depressing, but more tense. Things could break either way, it seems.

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To GM, Thanks for Everything, Trouble Funk

June 1, 2009 at 2:30 pm (By Maxwell James)

Trouble Funk’s got the song for this moment in General Motors’ history:

(no actual video, unfortunately)

~ Maxwell

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“Too Clever by Half”

June 1, 2009 at 1:49 pm (By Maxwell James)

Is my initial reaction to this bit of enthusiasm at Mother Jones on architect Edward Mazria and his “14X plan.” What it involves is using stimulus funding to incentivize banks to incentivize homeowners to retrofit their homes for energy efficiency. But that said, I can’t figure out what’s wrong with it at first glance.

So have at it, folks. I’m sure there’s a bunch of unintentional consequences that I’m missing here.

~ Maxwell

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Divided We Fall

May 29, 2009 at 4:18 pm (By Maxwell James)

The recent conversation on self-sufficiency got me thinking about the division of labor in society. At least since Adam Smith, it has been taken for granted that an increasing division of labor is a net positive – it leads to increasing specialization, productivity, and hence wealth for all. Even Marx did not really question this argument – his theory of alienation challenged it somewhat, but he never proposed that a society with decreasing division of labor would be superior.

Because of that, it’s been striking to me how much of the ambiance of this blog has circulated around issues of self-sufficiency. If the division of labor in a society continually increases, it follows that self-sufficiency will continually decrease. More and more work that might have been done on an individual basis gets “outsourced” to firms that can do it faster, better, cheaper, and individuals therefore focus their lives on a narrower and narrower range of tasks.

Is it possible that we’ve arrived at a point where there is now too much division of labor? If so, how could we remedy that?

~ Maxwell

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May 29, 2009 at 12:59 pm (By Maxwell James)

For those with time on their hands: the Edmund Andrews story, which I linked to a little over a week ago, has gotten even more interesting (hat tip to Randy). First, Megan McArdle noted an important omission from his story: his wife had filed for bankruptcy twice before, including as late as 2007. She also argued that his book, more so than the Times’ article I linked to, attempts to place the blame for their troubles more squarely on the shoulders of the mortgage industry.

Andrews and The New York Times ombudsman responded; you can read Brad DeLong and Maguire return the volley with a dose of invective. McArdle considers Andrews’ explanation here. Meanwhile, early reviews of his book at Amazon are pretty negative.

Also: for those still following the Chrysler and GM bankruptcies, the head of the NCEO clarifies that the equity shares granted to UAW do not in fact constitute employee ownership. I’m glad for the clarification.

~ Maxwell

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The Change We’ll Pay For (Next Year)

May 19, 2009 at 2:37 pm (By Maxwell James) ()

Many readers of this blog probably remember a time, a little over twenty years ago, when credit cards all charged annual fees with standardized 18% APRs and no silly little freebies. That all changed in the late eighties and early nineties, when Capital One pioneered the use of computerized risk models in the industry. This allowed their company to offer customized cards with terms based on the individual credit history of card owners. This in turn led to a widespread burgeoning of the US credit card industry, as other companies followed suit, and large numbers of consumers previously ignored by the industry became credit card users for the first time.

Well, it looks like that period of history may be over. The US Senate just overwhelmingly passed a number of new regulations limiting the ability of credit card companies to make money off of credit card users who carry a balance from one month to the next. Which means that to survive, the industry will have to find a way to instead make money off of credit card users who do pay their balances off each month. That means a return to annual fees, shorter grace periods, and probably less credit extended to consumers of lesser means.

I have mixed feelings about this development. On the one hand, by making the bulk of its money off of consumers who were either cash-strapped or financially undereducated, the credit card industry has always been dancing on the edge of a knife. People who don’t have a lot of liquid assets, and/or who struggle to manage them, are always going to be a higher risk for default. And “responsible” credit card users who pay off their balances every month are probably never going to be worth that much to the industry. They’ve gotten used to having their credit cards for free, and if the terms change too much for their liking, will just stop using the cards. They don’t need them enough.

On the other hand, for people of lesser means to have credit at all is a very meaningful development in the history of the human race. You can make a reasonable argument that the extension of consumer credit in the developed world is of a piece with the breakthrough of microfinance in the developing world. Credit cards do fund a lot of wasteful purchasing, but they aren’t just used to buy “stuff” in the United States; they also fund start-up businesses all the time. Used carefully, they can enable people to fend for themselves while trying to live out their dreams. What could be more American than that?

At the beginning of this blog Rod asked if we have changed. Perhaps not yet. But this strikes me as a genuine harbinger.

~ Maxwell

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A Personal Illustration

May 15, 2009 at 3:30 pm (By Maxwell James) (, , )

Of what led us to today. Wow.

(H/T McArdle)

~ Maxwell

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Paying with Attention

May 15, 2009 at 2:40 pm (By Maxwell James)

Over on Slate, Farhad Manjoo announces an interesting new update to the Firefox plug-in AdBlock Plus. Apparently, the newest version of the program will encourage users to selectively display non-intrusive (i.e., non pop-up) advertisements from websites they frequently visit. Manjoo goes on to describe this change as a potential ethical advancement for humanity, making in the process what I would describe as an interesting ethical argument:

I’ve heard many convoluted justifications for ad blocking—”it’s my browser and my computer, so I can choose what I want to download”but it’s hard to make an honest claim that these programs are ethical. The Web is governed by an unwritten contract: You get nearly everything for free in exchange for the hassle of a few ads hovering on the periphery—and occasionally across the whole screen for a few seconds. Advertising probably supports a huge swath of the sites you regularly visit. It’s obvious how rampant ad blocking hurts the Web: If every passenger siphons off a bit of fuel from the tank before the plane takes off, it’s going to crash.

I’m a little perplexed by this argument. Manjoo seems to be claiming that the currency with which we pay for “free” content is by submitting our attention to the advertisers who subsidize the content. But it’s not our attention they actually want, it’s our money.

That doesn’t even get into the issue of whether, if I remove the ad-blocker software and go back to ignoring banners and swatting popups like flies (or for that matter, muting the TV during commercial breaks), I am simply committing an act of slower, less pleasurable theft. I’m still a free-rider on any particular corporation’s dime unless I actually allow its advertisements to change my purchasing habits.

Oh, I know to a lesser extent there’s the whole schtick about building brand equity, getting consumers to talk about the ads they’ve seen, and so forth. Moreover, I know that marketing experts will argue that the ads will affect purchasing behavior even if consumers refuse to acknowledge it. And that is probably true.

But here’s the thing: marketing campaigns have long been understood to reach supersaturation points beyond which markets no longer respond to additional advertising. Is it not possible that this is true for the advertising industry as a whole, and that internet advertising in particular is so supersaturated  and ubiquitous that it no longer has any net positive effect on economic growth? It may be that at best it can convince consumers to change their purchasing habits rather than to increase their purchasing habits – especially in the midst of a large economic downturn.

In the end, it doesn’t matter that much if I pay that much attention to the sponsors of the web sites I browse. What ultimately sustains them will not be my attention, but the dollars in my wallet. And the ways I choose to spend that money are going to be influenced by many factors other than the banner ads AdBlock Plus conceals from my gaze.

~ Maxwell

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Here it is

May 15, 2009 at 11:32 am (By Maxwell James)

Via Tyler Cowen: Amazon is going into publishing. I’ve been wondering when this particular shoe would drop. Not surprisingly, they are focusing on unknown writers. And bloggers can apply!

This will be the first real test of whether the new media can come up with a viable business model. It’s about time.

~ Maxwell

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“Nonetheless, the incremental cost-effectiveness did not exceed $136,000…per life saved.”

May 14, 2009 at 1:48 pm (By Maxwell James)

That’s from the abstract of this 2005 study of whether mandatory nurse-patient ratios, as recently implemented in California, are a cost-effective means of improving mortality rates in hospitals. I believe the methodology of the study is relatively sound, though I’m a layman and you can judge for yourself. But their conclusion – that increasing nurse-patient ratios up to 1:4 is cost-effective – is a good illustration of the tensions at the heart of the health care debate.

One such tension is whether a life saved is actually worth $136,000. Is that a no-brainer? It really depends on how we value a  life – and how much life is really left in the person living it. It’s worth pointing out that the study only measures mortality in 30-day increments, and if a year of life is worth $129,000 as that article argues, it’s possible that’s often not as good a trade-off as it seems to be.

As Dave Schuler has often pointed out, the dramatic rise in health care costs over the last decade or three is a matter of supply and demand. Demand for health care services – especially towards the end of life – has grown dramatically. And if another 40 million or so Americans are added to national insurance rosters, it will grow dramatically again.

Meanwhile, the supply of doctors (especially general practitioners) has remained essentially static for years. Moreover at least until very recently there existed a well-publicized nursing shortage in the US, which could still reach 500,000 positions by 2025 (That estimate is based on a projection of advertised vacancies, not on an stated nurse-patient ratio; studies based on the latter often project up to 1 million positions by 2020).

The law of supply and demand suggests that, if supply remains static while demand continually increases, the per-capita costs of healthcare in the US will continue to rise dramatically. In my next post on this topic I’ll look at some of the phenomena that have led to the supply of doctors and nurses being as constrained as it is.

~ Maxwell

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