Saturday, June 27, 2009

Self definition

Everything one does has elements of self definition, even when acquiescing to social norms and/or power structures that define a set of rules that we must work within (since one may either choose not to oppose them or make their decisions in accordance with these norms or structures). If that acquiescence is purely intentional, then one may very well have the capacity to self definition without needing to diverge from norms.

Although social convention may tend to act somewhat against self definition in the strictest sense, it is also a required context for identity since, as social beings, we ultimately define ourselves in relation to our own community and other communities. After all, what sort of genuine individuality could be expressed by defining oneself in comparison to a monkey? We define ourselves in comparison to, and in contradiction to, other humans.

Economic factors may exclude some people from self definition if they must spend all their time working for basic survival and have no remaining energy to explore their being as a creative and thinking entity.

Trying to define self definition is, truly, a self-defeating thing to try to do, since it would suppose that some individual could understand what that would mean for each person. It would refer to things that are contingent on one’s own passions, sense of rationality, and their current context and past experiences.

Being influenced or guided by social convention is not in itself a bad thing. Being aware of the ways in which we are shaped by our social circumstance allows us to be more intentional about how we choose to define our own social, political and economic context. Many people read Foucault and decide to reject the social and political power structures or regimes that they face in society. I do not think this is what he was trying to do. I think he was trying to make us more aware of them so we contemplate how to maintain our capacity to self definition without compromising our willingness to play an active role in maintaining the practical economic benefits offered by being a part of a society where people respect rules and conventions.

The capacity to self definition could arguably be the ideal goal of democratic ideals. This is certainly more meaningful than the principle of 50% +1 majoritarian principles, although they do tend to be a convenient shortcut to making some kinds of decisions.

In short, the possibility of genuine spiritual and economic freedom may exist even when bound by sets of rules and conventions that shape one’s daily decisions. That scope of potentiality, however, generally only exists when the individual’s ability to participate in efforts to shape those very rules and conventions is presumed to be a legitimate and desirable use of one’s spiritual, political and economic self.

Sunday, June 21, 2009

to meat or not to meat. Is it natural?

I just read an article on Alternet that claims that eating meat is not natural. I'm not a meat eater, and sincerely believe that steering clear of the stuff is a much better way to live one's life. In any case, this is what I had to say about the article, which was riddled with half truths bordering on falsehoods.


To start with:

- eating meat IS natural. Humans are designed expressly to be able to eat either meat or other types of products. Hence being called omnivores, not herbivores. This is the same argument that I make when people try to tell me it's natural to eat meat. That's wrong too. It's natural to be able to do one or the other, and we have the choice.

- access to protein is a key ingredient for growth. When we started to hunt, we got the ability to access concentrated packets of protein. (We can now do so by cultivating plants with a high concentration of protein.) Getting so much bang for your buck in terms of protein would have been a huge advantage for any group of early humans who learned to hunt, since they could grow bigger and faster, and out-compete their neighbours (until farming came along, of course, which is arguably much less "natural" than eating meat).

- animals that eat plant products have long digestive systems because it takes so long for our enzymes to act on plant materials to be able to digest them. The logic of the argument that carnivores have short intestines to get rid of toxins quickly is back-asswards. Carnivores have short intestinal systems because, after chewing, meat degrades and can be digested quickly (not to dispel rotting flesh quickly.) This has been proven by comparative physiology that looks at the concentration of nitrogen (read protein) and materials that are hard to digest, such as cellulose, in animals diets, compared with properties of animal digestive systems. We need long digestive systems to be able to digest plants, not the other way around (although there are many more specifics to the story).

- also, the idea of bringing heart disease and cancer related to meat eating into an evolutionary argument is a joke. Heart disease and cancer, especially when correlated with meat eating, generally affect people well after their child bearing years, and therefore has limited (if any) relevance to an evolutionary argument.

- our hands may not be designed to tear flesh, but our opposable thumb is designed to make and use tools that do the job for us, while our large brain can figure out how best to close in for the kill. As such, the argument that our difficulty of shredding prey with our bare hands is evidence that eating meat is unnatural bears little relation to our biological and social evolution as humans.

Finally, I do believe that the vegetarian diet, if it follows some basic principles of variety, can be far more healthy than a diet that includes meat.

Eating meat is perfectly natural, but so is not eating meat, but given the health complications of eating meat and incredible inefficiency of producing protein in the form of meat, the choice not to do so is better for both us and the planet.

Thursday, June 18, 2009

the rare I told you so

I'm not usually the kind of person to say "I told you so", especially since it can ring false in hindsight. However, there are a couple of interesting cases that I feel like noting: first has to do with the financial crisis and the second has to do with a topic that is very much related to what I'm working on for my masters' thesis these days.


As for the financial crisis? Well, to my knowledge I was the first candidate for any political party anywhere in the world to state on the record (in a televised debate during which I more or less massacred the French language) that resolving the problems in financial markets would require a coordinated global response in terms of stimulus plans and easing problems in credit markets. (Actually, I am very much NOT a politician, but when offering to volunteer for the Green party before the last election, I was asked to be a candidate). In any case, this was ultimately the action that most governments ended up doing, in some part under pressures from experts at international institutions.


As for my particular area of interest? Well, I'm curious about the relations between violent conflict and agriculture. I happened to read last week that the recent revolution in Madagascar was largely a response to efforts to lease out land to foreign owners. The problem is that this would have pushed farmers off of land that they currently cultivate, but over which they have no secure rights. Somewhat against the primary thrust of what I'm working on was that they engaged in conflict to ensure their property rights, but the idea that the prospect of reduced certainty about tenure can have a vicious feedback cycle still rings through. In fact, the model that I'm working towards would exactly have predicted that the strategy being used in Madagascar would have increased the probability of conflict.

This is especially important because there are a large number of similar deals presently being negotiated. The benefits, of course, are the influx of foreign capital, which are important. But, without addressing the needs and 'rights' of traditional land users, the effects could be colossal. These negotiations will either have to take care of the interests of farmers who will lose their land or look towards moving to a draconian police state to prevent major civil conflict. The question might be: which types of institutions are likely to imply that governments would prefer the first approach to the second? Not exactly what I'm working on right now (which I figured out yesterday how to explain in precisely 12 words), but it is an important question nonetheless.

Anyways, there's an "I told you so" about two huge issues, the second of which is still enormously in play.

Wednesday, June 10, 2009

how not to find peace - how to travel the world - the real roots of the crisis

Some people have difficulty understanding why the Palestinians are pissed off. Consider the following quote, relating to a piece of legislation that is on the table in Israel at the moment:

"Palestinian Israelis who mark Israel's independence day as their people's nakba (catastrophe) "exploit the democratic and enlightened character of the State of Israel in order to destroy it from within" - and would be punishable under the bill by up to three years in prison."

My question is simple: does this bill reduce or increase the probability that some individual Palestinians will be interested in joining violent militias.

Targeting civilians is always wrong, whether the perpetrator is a suicide bomber or state. I am also quite sympathetic to arguments of Israel's right to self defence. But sorry, when sand is thrown in the eyes of the prospective terrorist, don't be surprised at the results. Palestinians must learn to live with Israeli's as neighbours in their community, at the household and regional level. The converse is clearly the case as well. The bill outlined by the above quote is in no way illustrative of a people who wish to live in peace with their neighbours.

The historical suffering of the Jews is a reality. Let its memory not be abused to justify the suffering of another group of dispossessed people.
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Some people have sometimes wondered how it is that someone who has never earned more than 20k in any year (typically much less than that) has managed to travel substantial parts of the world before their 30th birthday. Well, it didn't hurt that money from my grandmother almost entirely paid of my student loan after my first year of university, but aside from that ...

The answer is very simple: I don't own a car and am almost completely indifferent to luxury.

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Digging deeper into history for factors leading to the present economic crisis ...


Here is the argument - the move to flexible exchange rate regimes in Asia in the 80s and 90s is an important factor to consider when looking to the roots of the current financial crisis. I should explicitly say that this is not an argument against flexible exchange rate systems. I think the benefits outweigh the costs, but the costs may have been overlooked to some extent, due to the effects that they may have when countries look to reduce capital flight exchange rate risks associated with a flexible rate system.

The argument is actually fairly simply. Asian countries move to a flexible exchange rate system. This makes the Asian financial crisis possible because it allows credit market problems to multiply risks under capital flight, because Asian central banks had too little foreign currency on hand to ride through the crisis. After 1998, their strategy to minimize risks of capital flight and speculation under a flexible exchange rate regime was to pile on foreign reserves (especially US dollars). Had Asian central banks not, as a group, bought trillions of dollars worth of US treasury bills and bonds, the low interest rate policy following the 2001-2002 recession would never have worked, since there would not have been enough demand for these bonds at such low rates. Quite importantly, people who are looking for the historical roots of the crisis often look to that extended period of low interest rates as the cause of the subprime crisis because it underpriced risk in US mortgage markets.

Don't see the connection? Let's try it in reverse chronological order this time. The current crisis was largely triggered by the subprime crisis (although it was multiplied by the amount of leverage that financial institutions took out through various forms of derivatives). The subprime crisis was only possible with an extended regime of very low interest rates (although securitization very much exacerbated the problem). The extended regime of low interest rates was only possible due to the enormous appetite that Asian central banks had for foreign currency reserves, especially for US dollars. This appetite for foreign reserves was a byproduct of the Asian financial crisis. Especially, the desire to use foreign currency reserves to hold out against the risk of a speculative attack on a currency. Such risks are only possible in a flexible exchange rate regime. Hence, the introduction of flexible exchange rate regimes in Asia as a necessary (although clearly not sufficient) cause for the present global crisis.

Again, this is not an argument against flexible exchange rate regimes. They are a key ingredient for markets to find "efficient" prices. However, the argument does point to the fact that the indirect effects that shifts between exchange rate regimes have on global macroeconomic disequilibria have received rather insufficient attention.

Why is this important? Well, one of the largest issues on the table concerning global macroeconomic disequilibria is China's lack of interest in adopting a flexible exchange rate regime. What would China's optimal holdings of various international currencies be under a flexible exchange rate regime, and how would this affect risk evaluations among other market actors? What are possible long term effects of these decisions?

I don't think that history can precisely repeat itself, but that's not to say that we can't learn a whole lot from it. Let's not rush into a flexible exchange rate regime for the Yuan until central bankers in the world's largest currency areas (US, China, Japan, EU) have had a chance to carry out cooperative analysis of possible long term effects of a fully convertible Yuan.

Monday, June 1, 2009

the early retirement subsidy - the undesirability of Too Big To Fail

When the CPP started, life expectancy was 67. Today it is nearly 80, but the CPP continues to pay out as of one`s 65th birthday. Combined with rising health costs, we are paying through the teeth to subsidize our elder's early retirement.

Medical advances, most of which cost a lot of money, allow us to live longer and generally better lives. This gain has largely been transformed into a gain for those who benefit from subsidized early retirement. The solution, as proposed numerous times before, is that retirement ages have to go up. People can still retire when they want, but it should not be seen as a public right that the rest of us should have to subsidize an early retirement.

I don't propose significant changes to health care costs associated with an aging population, rather, that our social safety net should not be set up in a way that encourages people not to plan for their own retirement, all the while encouraging them to go into retirement when they may well continue to fruitfully labor on.

Unfortunately, many people have already made savings decisions that rely on assumptions about the nature of public income provisions beyond the age of 65. As such, any changes to the age where people become eligible for old age income supports, and perhaps also the CPP, should rise fairly slowly. It would be quite unreasonable to suppose that we should say to people who are presently 63 years old that their planned retirement date should move back by 2 or 5 years. A month or two would be much easier to swallow, and if they already had fixed plans then all they would be missing out on would be a couple of months of CPP payments. Perhaps a one month per year over 60years would be reasonable. Given ongoing medical developments and greater public knowledge of lifestyle choices that are conducive to a long and healthy life, presumably the life expectancy in Canada will be higher in 2070 than it is today, making a retirement age of 70 years old reasonable by that point in time.

Until some such changes are put into action, the Canadian tax code will continue to subsidize early retirement at a significant cost to the younger tax-paying generation as well as economic potential. Given concerns about the effects of declining population growth on the labour market, such a policy a) mitigates the undesirable side effects of slowing population growth, allowing society to benefit from the skills and experience that older workers have developed through their careers and b) limits the cost of subsidized early retirement to the tax-paying youth of today.

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I read an argument that Germany's financial sector is at a disadvantage because regulations limit mergers in the sector.

I have one main thing to say. "To big to fail" is not a feature of a desirable market structure.

How desirable has that proven to be? Economies of scale in marketing and synergies in operation aside, it seems that once again, a childhood expression yields insight that persists over the years. Don't put all your eggs in one basket. German banks may, on average, be somewhat less profitable than their more aggregated international peers, but German taxpayers will presumably never not face the burden of hundreds of billions of Euros for bailouts for companies that were too big to fail.

Their smaller banks also face greater incentive to differentiate themselves and experiment in innovative marketing and business methods. It seems to me, particularly when faced with evidence of the enormous failures of the highly aggregated American financial system, that placing limits on bank size carries certain benefits in terms of limiting risks and encouraging banks to become profitable through offering tailored products to market segments.

In short, I am doubtful that the benefits of banks that are "too big to fail" outweigh the costs. Perhaps we could learn something from the German model of financial markets, much like the world could learn something from the Canadian regulatory framework.