Say What?

I’m spending my Christmas vacation prepping a new course on globalization, which involves reading every one of the 71 articles in a globalization reader to see which ones I want to use. An in a piece on global organized crime by James Mittelman, I stumbled over this:

…the poverty trap of the relative decline of incomes…

So if Bill Gates’s income triples, and mine merely doubles, I’m in a poverty trap? Perhaps I should be hoping that my income declines but Gates’s declines further, so I can work my way out of that trap through a relative increase in income?

Selecting the essays for the class is not easy. Some of the globalization literature is steaming piles of bullshit, but I need to present it anyway so the students have familiarity with the various sides of the debate. But some of it is based on such basic errors that it’s not a matter of competing theories, but just being dead wrong. And yet an essay on the rise in global organized crime (which I suppose to be true; Mittelman certainly has studied that more than I have) is a pretty useful piece for exploring the argument that the significance and/or effectiveness of national governments has declined as globalization has increased.

But Mittelman’s argument is that this alleged poverty-trap is why people (in the particular example, Chinese from Fujian and Guangdon provinces) turn to organized crime. And this, even though he emphasizes the role of Triads (Chinese crime organizations), which long predate the current globalized era. It seems to me that a more straightforward explanation is that the tongs found new opportunities through globalization–just like legal corporations have. To the extent they were able to draw more people from those provinces into their activities, maybe it’s not because globalization–specifically the rapid but unevenly distributed economic growth in China created a poverty trap for them, but that it didn’t produce as much benefits for them as quickly as participation in new avenues of international crime did.

So it appears to me that there’s no need to assume a dubious poverty trap based on an apparent misunderstanding of relative and absolute income declines; just assume rational actors comparing their currently available economic options (especially as, according to Mittelman, and in agreement with what little I know of the subject), the criminal opportunity afforded an awful lot of them the opportunity to get to America, where better legal economic opportunities might ultimately be available to them, or at least to their children.

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About J@m3z Aitch

J@m3z Aitch is a two-bit college professor who'd rather be canoeing.
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10 Responses to Say What?

  1. James K says:

    One effect I would expect from globalisation is that the number of industries in each country should fall as each country focuses more on its comparative advantages. If a country happened to have a comparative advantage in illegal goods, then an expansion of organised crime int hat country would be expected.

    Of course, this wouldn’t explain a global increase in organised crime.

  2. Matty says:

    An increase in the logistical ability to trade (more large ships, better communications etc) without a lowering of legal restrictions might be a driver for at least smugling and the example of the illegal drugs trade suggests smugglers will drift into other more violent crimes either as an additional source of cash or because they can’t use legal means to protect their assets.

  3. Dr X says:

    James,

    Good questions/comments over at Dispatches re ban on the old incandescents. I’m just reluctant to wade into discussions over there that might require more nuance. Could be interesting question to pose here. I did see that our Randbot friend ;-) and DC weighed in, but it might be interesting to go a litle further with the discssion here.

    I wanted to mention that IIRC, Mckinsey did a study in Europe that found business adoption problems with new construction because developers are more concerned about up-front costs and so preferred incandescents. Now that doesn’t explain why when a business moves in that they wouldn’t switch immediately. I suppose the costs could be so great between fixture issues and up bulbs, that some businesses may not be able to afford the big, added investment, though it would seem smart to have that move in future plans.

    I’ve also wondered if this wasn’t just about consumers, but about compelling the producers of lighting to leave the business or invest in more heavily in R&D leading to consumer-acceptable replacements for incandescents. With cars, pollution controls had that effect on R&D. And initially, there were serious performance compromises that consumers probably wouldn’t have accepted if they had other options. Eventually, though, carmakers developed and adopted technologies that improved performance. Without compulsory installation of controls, I wonder what would have happened in a marketplace left to operate without the interference.

    Anyway, I don’t want to go on because this is a big OT and I apologize to everyone if I’m being too presumptuous by driving off road.

  4. lancifer666 says:

    Dr X,

    I have no problem with government guidelines that inform consumers of the benefits of a particular technology. Nor, per se, do I have a problem with government regulations designed to prevent degradation of shared resources, such as air and water.

    I do have a problem with setting up manufacturing restrictions, on a safe and popular product, that amount to a de facto ban. Especially when that action is predicated on the flawed assumption that CO2 is a “pollutant”. (Perhaps a topic that is ancellary to this discussion and best avoided at this time.)

    Your example of the emission restrictions placed on automobile manufacturers is an interesting one. I must admit that had the auto industry not been forced to adopt these restrictions that the innovation that has lead to cars that are both less polluting and more efficient would have been delayed by perhaps a decade.

    But I hasten to add that the fuel saving and performance benefits of these controls would most certainly have come by the mechanisms of technological advancement and consumer choice. In fact it could be argued that these early regulations forced the industry to install nascent and counterproductive kludges, such as air injection (smog pumps), that lead to poor reliability and performance and were quite often removed by their owners.

    This leads inevitably to James frequent point about government regulations that give incentives that their designers neglected to consider.

    At least that’s this “Randbots” conclusion. ;)

  5. J@m3z Aitch says:

    Dr. X,

    I think it’s really about the speed of adoption, not whether we will adopt. And I do have a problem with an authoritative “you shall adopt now,” rather than letting consumers adopt at the rate they’re comfortable with. Given how substantially we’ve reduced fossil-fuel power plant emissions since the enactment of the CAA, I just can’t see bumping up the timing on this next marginal improvement being such a matter of urgency.

    And as I said at Dispatches, I firmly believe if these things were marketed just as money savers the transition would already have been happening faster. That appeals to self-interest, whereas eco-friendly stickers on them appeal to people’s better natures–and guess which business model is generally more remunerative. ;)

    If hastening is really necessary, why not a tax, rather than a ban? That can resolve the externalities issue while still leaving individuals with choice.

    In my opinion, the choice itself is the root reason for wanting a ban. It’s not good enough that people pay an offsetting amount that equals out their bad choices; we must make sure that people don’t commit bad choices in the first place. It’s a moralist position, imo.

    I was tempted, when folks brought up the externalities issue (which, given the individual cost-savings in these cases, I suspect has greatly diminished effect on individual behavior), to drag in drug laws, because there’s no doubt drug use–particularly alcohol–has significant negative externalities; so if our justification is that we have to regulate negative externalities, how can we support legalization of drugs? Should I really have greater liberty to ingest a substance that could cause me to run a stop sign and kill a whole family than I should have to burn an energy-inefficient lightbulb and cause a very minor increase in emissions?

    I also wasn’t very impressed by the aging infrastructure that’s about to be overloaded argument. That’s a regional problem, yet we’re imposing a nationwide ban. And the problem can be met by utilities offering freebies and subsidies–if it’s cheaper for them to do that than upgrade the infrastructure, it’s quite a logical approach that they’d surely engage in. But of course for them it’s easier to get the government to force people to pay; that way it’s cheaper for the utilities to manage their potential grid overload problems.

    So in the end the only reason that really persuades me is the “OMG, crisis, we must act now and anyone who tries to argue against us is eeeevvvvulllllll!” reason.

    This isn’t going to affect me much. I’ll need to replace the dimmer switch in my dining room (and the only reason I haven’t done so yet is just not getting around to it, although having intended to for the last couple of years, because I want to replace the old post-and-knob wiring from the switch to the fixture at the same time), and I have a couple of three way lamps that might need a new switch (I’m not sure about that yet), but otherwise I’m wholly using CFLs, and am watching LED prices, which are getting closer to meeting my price point. So this isn’t a personal whine about how badly this ban is going to disrupt my precious life.

  6. J@m3z Aitch says:

    @Lance,

    Your example of the emission restrictions placed on automobile manufacturers is an interesting one. I must admit that had the auto industry not been forced to adopt these restrictions that the innovation that has lead to cars that are both less polluting and more efficient would have been delayed by perhaps a decade.

    That’s an important theme in the policy literature; that setting enforceable standards causes greater investment in better technology. There are choices about how to set standards. Technology standards that have been used include requirements to use the industry standard, the most cost-effective technology, or the best available technology. But none of those give an extra push to R&D. Setting either ambient or emissions standards can, it is argued, if they are set beyond what is currently possible (or if possible, beyond what is currently affordable). That’s why the compliance deadlines are normally set quite a few years into the future.

    But democratic government has a unique problem–it has a very difficult time establishing credible commitment, both because it has to be fairly responsive to the public and because no current set of legislator can bind a future set of legislators. So these deadlines often–more often than not–get extended as businesses plead for more time. Perhaps sometimes its because the technology has not yet become available, but also sometimes just because it’s still too costly (in the eyes of the businesses), or at least more costly than lobbying for an extension of the compliance deadline is.

    So I think there’s an open question of how effectively these standards improve the technological development. I think it would be facile to suggest they never do, but I think it would be equally facile to suggest that they always do. That is, sometimes the actual effective dates are probably determined by a pace of technological development that might have occurred anyway, rather than the pace of development being determined by the standards.

    But I hasten to add that the fuel saving and performance benefits of these controls would most certainly have come by the mechanisms of technological advancement and consumer choice. In fact it could be argued that these early regulations forced the industry to install nascent and counterproductive kludges, such as air injection (smog pumps), that lead to poor reliability and performance and were quite often removed by their owners.

    There’s that, too, which any good policy analyst ought to count as an actual cost, but which true-believer advocates never will.

  7. Troublesome Frog says:

    In my opinion, the choice itself is the root reason for wanting a ban. It’s not good enough that people pay an offsetting amount that equals out their bad choices; we must make sure that people don’t commit bad choices in the first place.

    There’s probably a little bit of that, but it’s always good to avoid ascribing nefarious motives to what might otherwise be mundane practical considerations. As written, the Energy Independence and Security Act of 2007 passed with bipartisan support and was signed into law by a Republican president. Is there any chance that a Republican would have touched it with somebody else’s 10-foot-pole if it had contained a tax rather than a ban? The earlier version with tax increases on oil had none of the Republican support the tax-free version had. I’m all for Pigouvian taxes over bans, but we’ll never have them until somebody calls an exorcist to banish Grover Norquist back to wherever he came from.

    The payback on LED lights has gotten shorter, but they’re still pricey. Much better than CFLs, but definitely not yet for everybody. We’re happy we made the investment because we have a *lot* of pot lights in our house, so replacing bulbs, pumping out halogen waste heat, and worrying about the current draw on questionable splices to my old aluminum wiring were adding up to a real pain. Now I have a bunch of LEDs and one halogen downstairs, and the halogen alone consumes almost half of the power to light my entire first floor. Not having a bunch of restaurant-ready heat lamps heating the top of my head during the summer is nice too.

  8. J@m3z Aitch says:

    questionable splices to my old aluminum wiring

    Double gulp.

  9. Troublesome Frog says:

    Yeah, cleaning those up has been exciting. The original installation was very clean and professional, just done during a dark age of electrical wiring materials. The real project was opening each box to see if any of the DIY owners over the last 40 years have attached copper in not-so-good ways. Of course they have.

    Things are much better now, but I’m still a lot happer when each pot light is drawing a few tens of mA rather than half an amp per bulb. The trick was finding LED spot lights that didn’t hum. I think a lot of the designers use cheap transformers inside them or don’t pot them correctly, so you can end up with a 60 Hz whine. And of course, anything that makes noise is moving, and if there’s one thing solid-state stuff shouldn’t be doing, it’s moving. I can’t tell you how many of them I returned (with shredded ultrasonic welded packaging, of course), until I found that the Lowe’s Commercial Electric brand were quiet (or at least emitting a frequency outside of my hearing range). I’ll put up with that from a $0.75 bulb, but not from a $16 bulb, and certainly not from twenty $16 bulbs all at the same time.

  10. J@m3z Aitch says:

    Well, I can’t really mock you, because I still have some knob and tube wiring I haven’t replaced. Not much left, anymore, but there are a number of wires running through the attic that still are hot and I’m not quite sure where they’re all going.

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