Holiday Break

Taking a break from posting this week for the Holidays - see you next year!

76. Oil and Exclusiveness

Note: This post is the seventy-sixth in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

This week's post was going to be part 2 about the book, "The Strategy of Conflict" by Thomas Schelling but I read the second half of the book and, while it was interesting, I didn't see anything too relevant to our purpose here.

So instead, I'm going to talk about a post from Daniel Little that I came across today over at Mark Thoma's 'Economist's View'.

From Daniel's post:

"Hate as a social demographic : Every democracy I can think of has a meaningful (though usually small) proportion of citizens who fall on the extreme right by any standard: racist, White supremacist, hateful, anti-immigrant, anti-Semitic, anti-Muslim, nativist, nationalist, or violently anti-government individuals and groups. In the United States we have many, many organizations that are basically racist and potentially violent hate groups. They provide a basis for cultivating, recruiting and mobilizing like-minded followers, and they are sometimes co-opted by opportunistic politicians for their own narrow purposes. The Southern Poverty Law Center and the Anti-Defamation League do a great job and a needed service in tracking many of these organizations. (For example, SPL monitors 26 hate groups in the state of Michigan.) The umbrella term for these organizations and individuals is "hate groups" -- individuals and organizations who organize their views of the social world around intolerance of other groups and a motivation to harm or subordinate those other people.

A recent report by the Institute for Research and Education on Human Rights provides a detailed snapshot of how some of these racist groups have shown up in the Tea Party movement. The NAACP made a very careful statement about racist statements and provocations that had occurred at Tea Party protests in 2009 and 2010, including the egregious incident that occurred in Washington in which Representatives Emanuel Cleaver, John Lewis, and Barney Frank were showered with vitriol. And this temperate and careful statement was derided by Tea Party leaders. The IREHR study goes a long way to document the concerns raised in the NAACP statement.

Here is a summary finding from the IREHR report:

Tea Party organizations have given platforms to anti-Semites, racists, and bigots. Further, hard-core white nationalists have been attracted to these protests, looking for potential recruits and hoping to push these (white) protestors towards a more self-conscious and ideological white supremacy. One temperature gauge of these events is the fact that longtime national socialist David Duke is hoping to find money and support enough in the Tea Party ranks to launch yet another electoral campaign in the 2012 Republican primaries. (7)

What I find really worth considering is the question of the fact of the very existence of these pockets of virulent racists and anti-semites in our society. I'm not thinking here of garden-variety racial stereotyping and prejudice, which is surely much more widespread, but of a kind of racism that extends to overt hostility and sometimes violence against the other group. It is hard to estimate the percentage of our society that falls in this category, though there are some public opinion surveys that help us make a crude estimate (Howard Schuman, Charlotte Steeh, Lawrence Bobo, Racial Attitudes in America: Trends and Interpretations, Revised Edition and Schuman and Bobo, "Survey-Based Experiments on White Racial Attitudes towards Residential Integration" (link); Pew Research Center, "Race, Ethnicity & Campaign '08" (link)).

But here is the important question: why do a certain number of people in modern societies have these attitudes in the first place? Is it just a sort of basic fact about our population that a certain percentage of us fall in this mindset? Are there specific features of our informal system of acculturation that creates this minority of hate-disposed people? Are these the result of a sort of sub-culture of militia encampments, prison gangs, and biker groups who are somehow able to promulgate their hatred to new recruits? Is it ignorance, disaffection, and economic uncertainty that brings out these qualities in otherwise decent people? In short -- is it the organizations that produce the hate in some people, or is it the hateful individuals who create the organizations?

Michael Mann's The Dark Side of Democracy: Explaining Ethnic Cleansing is one kind of empirical study of a related question, the occurrence of murderous ethnic cleansing. Here are a few of his hypotheses.

Murderous cleansing is modern, because it is the dark side of democracy. Let me make clear at the outset that I do not claim that democracies routinely commit murderous cleansing. Very few have done so. Nor do I reject democracy as an ideal – I endorse that ideal.Yet democracy has always carried with it the possibility that the majority might tyrannize minorities, and this possibility carries more ominous consequences in certain types of multiethnic environments. (2)

Ethnic hostility rises where ethnicity trumps class as the main form of social stratification, in the process capturing and channeling class-like sentiments toward ethnonationalism.

The danger zone of murderous cleansing is reached when (a) movements claiming to represent two fairly old ethnic groups both lay claim to their own state over all or part of the same territory and (b) this claim seems to them to have substantial legitimacy and some plausible chance of being implemented. (2-9)

These are political-structural theories of the conditions that stimulate outbreaks of hate-based mobilization and murderous ethnic cleansing. But actually, Mann never addresses my question head-on: what accounts for the existence of a certain small percentage of haters in a given society. Mann is interested rather in the behavior and the occurrence of mass mobilization for ethnic violence in certain times and places -- the involvement of thousands of citizens in acts of violence and murder against their fellow citizens. And he doesn't believe that the actors are exceptional; rather, the circumstances elicit the terrible violence from people much like all of us. Here is how he categorizes the perpetrators:

There are three main levels of perpetrator: (a) radical elites running party-states; (b) bands of militants forming violent paramilitaries; and (c) core constituencies providing mass though not majority popular support. (9)

And he doesn't think there is anything distinctive about the third group:

Finally, ordinary people are brought by normal social structures into committing murderous ethnic cleansing, and their motives are much more mundane. To understand ethnic cleansing, we need a sociology of power more than a special psychology of perpetrators as disturbed or psychotic people – though some may be. (9)

This "ordinary people as killers" theory (c) doesn't really seem to do justice to the problem at issue here. And the political opportunists who play the hate card aren't too hard to understand (a). It's really the people Mann includes under (b) that are of concern to me -- the true believers, the extremist White supremacists or virulent anti-Semites who become the local activists and paramilitaries that I'd like to understand better. And this population seems to be defined by the attitudes, motives, and ideologies that they bring with them, rather than the inter-group dynamics and political opportunism that Mann focuses on. So, once again, where does this mentality or psychology of activist hatred come from in our society (or in other contemporary societies)?

The easy answers are ready to hand. We might postulate a strand of political culture and thought in American society that reproduces hate and racism in some of the young people who are exposed to it. (Hate on the Internet falls in this category.) Or we might postulate a recessive "racist personality" type that is a portion of the human psyche (along the lines of the theory of the authoritarian personality). Or we might postulate that lack of opportunity and an enduring situation of defeated expectations pushes some young people into hate (skinheads in Britain or Germany).

But I don't find any of the theories very convincing by itself. So we seem to have an important theoretical issue here that is unresolved: where does "hate" come from?"

My own reaction to this was quite similar to that of 'grumpy curmudgeon' who commented at Economist's View,

"I'd turn the question on its head. How is it that modern societies have managed to create a sense of tolerance in the majority of the population. It seems wonderful (in both senses of the term) compared to the majority of human history when people have feared and hated anyone who looked, worshipped, spoke, etc. differently - that seems more the natural state of humanity. Think of children and their readiness to tease or bully anyone who is different.

When we can understand whence the West's success in building a sense of acceptance and tolerance of others in the majority of the population, maybe we can understand why people remain in the natural state."

To me, the xenophobic behaviour that Daniel described in his post is reminiscent of the Guardian precept 'Be Exclusive' which Jane Jacobs contrasted with the Commercial precept of 'Collaborate Easily with Strangers and Aliens' in 'Systems of Survival'

So I think the response to the curmudgeon's comment is that what makes the West different in the last few hundred years is the spread of the commercial syndrome which is based on win-win transactions, where the more transactions you make, the better you are, so artificially restricting yourself to a certain skin colour or religion or orientation just hurts you.

People tend to try and fit this progression of the commercial syndrome into a left-right or progressive-conservative frame, but I'm not sure that makes a lot of sense. I read lots of books where people try to balance the good of recent decades against the bad, but what they end up listing is a list where every element represents the expansion of the commercial syndrome. So the good of equal rights and women voting, is cast against the bad of expanding corporate power, inequality, advertising overload and loss of community spirit.

How often have you head people say things like 'Who could have imagined that [X] years ago [formerly discriminated against group] [y] would now be treated in an equal manner.' And then they treat this is a sign that if this victory could be achieved, then surely other victories such as ending poverty or restraining plutocracy can also be achieved, not seeming to realize that the same force that brought victory in one instance is what brings defeat in another - that the growing recognition of equal rights for various groups is a sign that we are less likely to solve problems caused by over-reliance on the commercial syndrome, not more.

Take recent events in the U.S., for instance. On the one hand, the country faces a massive deficit, is fighting multiple wars, faces record high inequality, has record low tax rates on the wealthy, is in the middle of a financial crisis largely caused by the actions of wealthy people and large corporations, is led by a Democratic president, and had a situation where tax cuts for the wealthy were set to expire. It's hard to imagine circumstances more favourable to a tax increase (restoration to previous levels) on the wealthy and yet, wouldn't you know it, the tax cuts for the wealthy were extended.

Meanwhile, the U.S. Senate strikes down the ban on gays and lesbians serving in the military. Many will see this as one step forward one step back in the U.S., but it's really two steps in the same direction.

What I wonder, and this is pure speculation here, is how much of this spread of commercial morality and it's ascendancy over guardian exclusiveness, is dependent on an economy that is continually in rapid expansion mode (by pre-industrial revolution standards) due to the ever increasing population and ever increasing use of energy, first from trees and whales and later from coal, gas and oil.

If we reach a point where we are unable to continue simultaneously increasing both world population and per capita energy consumption¹ then will the commercial syndrome be forced into retreat? And what would such a retreat mean in places like North America where many identifiably different groups of people currently live in relative harmony?


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¹ Reaching such a point seems more and more plausible with each passing year - where once we replaced an old fuel source with a better one (coalwood, oil>whales, etc.) now we replace an old fuel source with a worse one (crude oil > oil sands) - not a good sign.

75. The Strategy of Conflict Part 1, Deception and Tradition

Note: This post is the seventy-fifth in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

This week's post is about the book, "The Strategy of Conflict" by Thomas Schelling.

Writing in the 1960's, Schelling was concerned that the field of game theory was too focussed on zero-sum games (games where one person's gain is another's loss - think chess). He proposed a continuum of games, with a pure zero-sum game at one end, and a pure coordination game (where both people gain if they make the right choices and both lose if they don't - think charades) at the other, with 'mixed-motive' games in the middle. At the zero sum game end of the spectrum, participants in the game have negatively correlated outcomes (what's good for me is bad for you) while at the coordination end, they have positively correlated outcomes (what's good for me is good for you as well).

Schelling recognized that in the zero-sum game, deception and secrecy was the order of the day, while in the coordination game, open, forthright communication (honesty) was the key to success.

In the coordination game, Schelling offers a list of examples of how people will find a way to coordinate even when they can't communicate directly with one another:

"Name 'heads' or 'tails.' If you and your partner name the same, you both win a prize.

Circle one of the numbers listed in the line below. You win if you all succeed in circling the same number.

7 100 13 261 99 555

..."

These are the first two in a list of examples that show that when people need to agree on something without communicating, they focus on whatever they think will be the most obvious element to everyone ('heads' because it is written first, '7' because it is the first number in the list, in a later example, dividing a territory along a river since it is the most notable feature of the landscape.)

Later on, Schelling introduces games where the two participants must divide something between themselves. Attacking the other participant can lead to a gain for yourself, but reduces the total amount to be divided. The participants overall do best when they can identify some agreeable way to divide the pie without fighting, but individual participants do best if the agreement is made to suit them.

Schelling theorizes that in situations of this nature, tradition can play a powerful role in providing a focal point that people can agree on. Any attempt to break with tradition re-opens all the contention for position of the various parties involved and can lead to conflict and poorer results for all unless a new tradition can be quickly established¹.

Says Schilling, "We have now rigged the game so that the players must bargain
their way to an outcome, either vocally or by the successive moves that they make, or both. They must find ways of regulating their behaviour, communicating their intentions, letting themselves be led to some meeting of minds, tacit or explicit, to avoid mutual destruction of potential gains. The 'incidental details' may facilitate the players' discovery of expressive behaviour patterns; and the extent to which the symbolic contents of the game - the suggestions and connotations - suggest compromises, limits and regulations should be expected to make a difference.

It should, because it can be a help to both players not to limit themselves to the abstract structure of the game in their search for stable, mutually nondestructive, recognizable patterns of movement. The fundamental psychic and intellectual process is that of participating in the creation of traditions"

In 'Systems of Survival' Jane Jacobs, while not using the language of game theory, expressed a similar speculation about the role of tradition,"I suspect one reason revolutionary governments have become cruel so easily and swiftly after ascendancy is that they've lost the brakes of tradition."

If there wasn't the same potential in the situation for destructive conflict, then agreement, and tradition, wouldn't need to carry the same premium, but in situations where there is potential for a costly back and forth battle, it's better to reach some agreement than none at all - and the bargaining can come down to who can identify a 'traditional' settlement that favours their interests.

That's as far as I've got so far in 'The Strategy of Conflict' but even if there is nothing else interesting in the rest of the book, it's been worthwhile.

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¹ For an example of how angry people can get with even a trivial break in tradition, consider the reallocation of a small amount of downtown Vancouver traffic right of way from cars to bicycles and just how angry this break with the 'all cars all the time' tradition has made people, leading to what one of the few sane articles written about the change accurately described as 'an outpouring of spectacular gibberish' - the gibberish makes more sense if you understand the enraged car drivers as being worried that once tradition has been broken in this fashion, who knows where it will lead or when it will stop.

China's Bubble

Just for the record, I thought I'd mention that this article by Ambrose Evans-Pritchard on the bubble in China is pretty convincing.

It's hard for me to believe that China is in the midst of anything other than a massive property bubble on a similar scale to Japan in the 80's or much of the developed world over the last decade or so.

That is all - if you want more details, read the article.

74. The Entropy Law and the Economic Process

Note: This post is the seventy-fourth in a series about government and commercial ethics. Click here for the full listing of the series. The first post in the series has more detail on the book 'Systems of Survival' by Jane Jacobs which inspired this series.

This week's post covers the work of economist Nicholas Georgecsu-Roegen. Geoergescu is best known for his book, 'The Entropy Law and the Economic Process' but I don't really recommend reading that book as I found it long, dense and filled with large sections where I wondered what point the author was trying to make. A better bet is this online essay on energy and economic myths provides an online source that covers many of his core points.

The primary point that Georgescu-Roegen emphasizes is that the second law of thermodynamics means that the energy in the universe is constantly moving from a more 'ordered' or concentrated state (in which we can make it do useful work for us) to a less ordered, more dispersed state (which is useless to us). Imagine a glass of hot water poured into a glass of cold water – eventually all the water converges to a standard temperature.

It is the more concentrated or 'low entropy' components of the world that have allowed us to build our current highly complex civilization. But the low entropy source we are relying on primarily is the mineral / terrestrial sources such as coal, gas and oil. Georgescu emphasizes that we must begin transitioning from these sources to a more sustainable future in which we rely on energy from the sun in order to power our civilization.

The message of switching from non-renewable to renewable fuels is familiar to us now (as a child in school, I recall watching a film with the bad red-hatted non-renewable fossil fuels pitted against the happy, good, blue-hatted renewable fuels such as hydro and nuclear (I grew up in Ontario)) but was controversial when Georgescu-Roegen started writing about it in the 60's and 70's.

Considering he was writing in the 70's, Georgescu-Roegen does make some telling points regarding our current trajectory,

"From the viewpoint of the extreme long run, the terrestrial free energy is far scarcer than that received from the sun. The point exposes the foolishness of the victory cry that we can finally obtain protein from fossil fuels! Sane reason tells us to move in the opposite direction, to convert vegetable stuff into hydrocarbon fuel"

(as indeed we currently are trying to do, replacing oil with biofuels. Of course whether there is enough low entropy available from crops to make running automobiles feasible on a large scale remains to be seen)

"a great stride in technological progress cannot materialize unless the corresponding innovation is followed by a great mineralogical expansion. Even a substantial increase in the efficiency of the use of gasoline as fuel would pale in comparison with a manifold increase of the known, rich oil fields."

(witness the U.S. spending billions or trillions of dollars to free up the oil in Iraq for global consumption.)

".... If progress were indeed exponential, then the input i per unit of output would follow in time the law i = i0(1 + r)-t and would constantly approach zero. Production would ultimately become incorporeal and the earth a new Garden of Eden."

(Compare the incorporeal nature of the economic explosion of the internet to previous, very corporeal, revolutions driven by coal and railroads or oil and cars.)


Georgescu-Roegen's work comes back to a central theme we have encountered many times in this series, the conflict between a worldview with no limits and one which does have binding limits. It's no surprise that most of Georgescu-Roegen's arguments are directed at economists since economists are the keepers of the commercial syndrome's, 'more is better, no limits' ideology.

In this case, despite making some good points as noted above, I didn't find Georgescu-Roegen's arguments particularly relevant to current decision making. I agree that human civilization is not immune from the force of the second law of thermodynamics, but what would interest me more is a more pragmatic assessment of what risks we face due to our rising consumption of low entropy sources of energy, as opposed to simply making the abstract argument that we will run out of low entropy sources of energy at some (potentially very distant) point in the future.

Georgescu-Roegen felt that we could make the necessary changes to subsist solely using the energy from the sun if we had the desire and organizational capacity to do so, but we was skeptical that we would take this path,

"Will mankind listen to any program that implies a constriction of its addiction to ... comfort? Perhaps the destiny of man is to have a short but fiery, exciting, and extravagant life rather than a long, uneventful, and vegetative existence. Let other species -- the amoebas, for example -- which have no spiritual ambitions inherit an earth still bathed in plenty of sunshine."