Archive for November, 2007

Man, a Threat to Nature?

Saturday, November 10th, 2007

Discussions on the environment and environmentalism are often assuming a “man vs. nature” point of view. According to this view, man is a “threat” to nature and whatever man is doing causes harm to nature and, in the long run, to man.

But the exact view of what is man and what is nature is very seldom communicated. It should however be reasonable to assume there are at least three ways we can discuss man and nature. The most extreme view should be that man and nature are different in any way – that nature is whatever man is not and vice versa. If this view is adopted, we will end up with what is sometimes called Ecofascism, a view that essentially describes man as the threat to nature. Some ecofascists claim the “best” thing for the world is simply to wipe out humankind, or at least a big part of the world population.

The opposite extreme would be the claim that man is a part of nature and that everything man does is therefore also a part of nature. This view makes more sense historically, since man, following the theory of evolution, is a product of nature and is always acting in and with respect to nature. This should not, however, be interpreted as a view that is basically apologetic to everything man does to his environment. On the contrary, since man is part of nature and fundamentally dependent on “nature” he destroys the basis for his own existence if harming “nature.”

A third view would be to adopt a view somewhere between these two extremes, which would mean man is both part of nature and could be seen as a distinct part of it that might be acting in a way threatening nature (and also his own existence). Most people, I believe, would adhere to this “middle” position, even though the rhetoric used is often borrowed from a somewhat ecofascist view.

The question we ask is, Is man a threat to nature? The answer needs not be discussed at length, since most people would agree (whether correct or not) that this is so. We are often described as non-reflecting, non-understanding profit-seeking machines that care not for nature or the well-being of the next generation of our species.

This view of man being very focused on short-term profits and generally neglects or ignores long-term costs is often confessed to in discussions on environmental issues. Even in the “balanced” middle between the two extremes discussed above, man is seen as a parasite on nature and the main reason for the imbalances in the ecological system.Examples often used are the mining for natural resources and the drilling for oil, or the overcutting of the rain forests (the “world’s lungs”) . In the former case, our quest for riches devastates large areas of land just so that we can “be richer,” even though it is at the expense of our own well-being long term. Or we, as humans, exploit the treasures of nature in order to make use of the energy stored in the depths of the earth (or the sea) just so that we can produce more goods and products. And the rain forests are devastated and essentially threatened by our shallow quest for materials and comfort.

In this view, it seems man is identified as a special condition in nature. Man is a product of nature, but a product that does not honor the contract – man does not contribute to the harmony of nature and is in most ways a threat to life on earth per se.

Locusts and Elephants

This view is however too simplistic and narrow. If man is really defined as an absurdity, a creation of nature that is responsible for the imbalances in nature, then nature is the balance and man is that which causes the imbalance. This, essentially, is the view of the ecofascists – man is a threat to nature.

But even if this view is accepted as the definition of man vs. nature, there are obvious problems we must deal with. Man as a short-term profit-seeking animal put aside, there are other species in nature that definitely fit the characterization of man.

Elephants are well-known to be a migrating species. The reason they migrate is simply that they eat everything that can be eaten in an area, and are forced to move when they run out of food. When elephants arrive to a green and naturally “prosperous” part of the savanna it is only a matter of time until all the green “riches” are devoured. Are elephants a threat to nature?

The same story can be told of locusts. Big swarms of locusts, as described in many historical documents as well as in the Bible, devour everything and leave when there is nothing more to feed off. This may be a problem to farmers, but it should also be a problem to other animals living in the area taken hostage by a swarm of locusts. Are locusts a threat to nature?

The Role of Technology

The answer to this question is always “no.” Even though both elephants and locusts fit the description of man, in the sense that they are short-term profit-seeking animals that fundamentally upset the balance in nature, they are not thought of as a threat to nature. Rather, they are – as being non-human – often seen as parts of the ecological system. Furthermore, they are seen as a necessary part of the system, making room for new plants, insects, and mammals through their devastation of status quo. Then how and in what way is man different?

The difference between man and elephants or locusts is often said to be technology. The reason man is a threat to nature when causing imbalance in the system, while other animals having the same effect on their environment are not, is that man uses technology. Man’s not being limited to the state in which he was brought to the world means he has overstepped the “authority” he has been given by nature; man has, through adopting technology, not honored the natural contract.

The essence of this argument is that development and progress is seen as a bad thing. This is an argument for primitivism, an argument saying any kind of creation that isn’t directly the effect of “nature” is a perversion. But this argument too doesn’t supply good reason to condemn man as an anti-nature creature.

If the use of tools and the creation of shelter and community are threats to nature, which is essentially what this argument says, then all species making use of such things should be condemned. What about beavers making dams through establishing shelter? What about chimpanzees using tools to find food? What about birds making nests in the crowns of trees? What about animals digging holes to provide shelter?

These animals aren’t condemned as humans are, even though they are obviously making use of technology. Rather, their technologies are deemed “natural” and “part of nature” (even though they are created by these animals just like a hammer is created by humans).

The argument is thus not about technology per se, the argument is against human technology.

There may be many reasons for singling out human technology as a threat to nature whereas other kinds of technology are not. For instance, it is rather obvious that the level of complexity and efficiency of human technology is (at least for the latter centuries) much higher than other animals’, which means human technology could – at least theoretically – be a graver danger to life. (Talking of, for instance, the atom bomb this should be an obvious conclusion.)

But if technology in itself is not the problem, which is obviously the case, and thus that only certain types of technology is – then what is the reason for condemning a whole species? Shouldn’t it be much more legitimate and honest to condemn that kind of technology? Or even better: shouldn’t the argument rather supply a legitimate basis to condemn certain uses of certain types of technology that pose an obvious threat to our environment?

The argument and the conclusions drawn from it don’t go well together. It seems the argument could, if restructured in such a way that it becomes a legitimate argument, supply a good basis for identifying high risk technologies and thus take the necessary precautions so as to minimize risk or at least limit damages of its use. It should also allow us to identify which technologies can be adopted in order to protect or even strengthen nature’s natural balances.

But these are not conclusions championed by the proponents of the argument – the “environmentalists” wish to abolish technology. One might wonder what is their real goal. As has been shown above, man cannot be singled out as the only short-term profit-seeking animal (if that is an established truth) and it also cannot be established that technology per se is a threat to “nature.” It is not even true that all human technology is a threat, but the conclusion is still that it should be abolished.

What is the real goal? Perhaps the real goal of this argument, the agenda of the environmentalists adhering to this view, is something other than finding a way to establish harmony between “nature” and “man.” The agenda, it seems, is to establish that man is basically unnatural and thus not a part of nature, which makes the argument fundamentally circular. One might wonder, if the purpose is to identify man as something external to nature, something not part of or created by nature, then what is the ultimate goal?

What are the conclusions to be drawn from identifying man as literally unnatural?

Ronald Coase & Market Bias Towards “Socialism”

Thursday, November 8th, 2007

In his well-known 1937 article “The Nature of the Firm” Ronald Coase explains the reason for firms as a solution to inherent problems in a market context. The argument is basically that firms arise because their hierarchical and process-controlling structure offer a way of arranging and supplying the factors of production that is in many ways cheaper than the “normal” market solution.

The market solution, according to the main body of economic theory, is based on the assumption that there are no real costs of transacting, since there is no cost of knowledge. All actors in the market have “perfect knowledge” and thus there cannot be costs associated with “finding” and communicating knowledge. This “ideal” situation may offer a number of simplifications important to the numerous, but is essentially wrong if thought of as descriptive of the real world.

In the real world, whether the market is free or regulated, there is no such thing as perfect knowledge. Rather, every action and interaction entails cost only in order to come about. Any seller and buyer need to find each other, negotiate terms, as well as monitor the other party so that he or she complies with the terms of the contract. These costs, generally called “transaction costs” since they occur to make the transaction happen, are generally high and difficult to overcome (if at all possible).

Since transaction costs permeate the real market, which is not the case in the economic theory of the market, every action and interaction is costly. Every decision that has to be made in order to bring about production of or trade for goods and services entails these costs. Coase’s argument for the firm is here that the firm, through management planning, can internalize these costs and make them part of the interior workings of the firm and thereby avoid the lion’s share of these costs.

This is done through establishing for instance employment contracts, where the employer pays the employee to “follow orders” rather than negotiate and establish contracts with other actors in the marketplace each and every time a new type of task needs to be carried out. As long as the manager of the firm manages to plan the internal processes in a way that is at least as efficient as the workings of the price mechanism in the market this internalizing makes sense.

Following the assumption that the manager, or “entrepreneur” to use Coase’s terminology, is a profit-maximizer (as is usually the case), he or she will want to internalize costs as long as the marginal benefit is at least as high as the marginal cost. In layman’s terms, the manager will choose to hire more people as long as the cost of doing so does not exceed the costs of carrying out the same tasks “on the market.”

We will thus, if Coase is right, see firms find internal solutions rather than rely on the market and its price mechanism for as long as:

Marginal benefit (MB) > Marginal cost (MC)

But this should not be interpreted as firms will internalize costs whenever MB > MC and “externalize” these costs again as soon as something in the market changes (e.g. price) so that MB < MC and there is actually reason for “outsourcing.” These processes are subject to tardiness – they take time and require the firm to focus and invest money in restructuring production processes rather than producing. Thus, we should, to a certain degree, be able to truthfully claim the firm will only act if there is a sufficient amount of savings to be made from acting.

Does this tardiness work the same way for both internalizing and externalizing? Can we claim a firm will always choose to restructure as soon as the difference between marginal benefit of internalizing (or keeping internal) and marginal cost of externalizing (or keeping external) is above the sufficient level?

The answer to this question should be no, and there are multiple reasons for this.

Firstly, the costs of internalizing are explicit and in general more “visible” than costs of making transactions in the market place. This should mean that if a firm chooses to internalize a certain function or process, it is done because it is believed that the firm “can afford it.” It is not as easy to calculate the real costs of externalizing, which means there should be a greater tardiness for the latter simply because understanding and predictability of the two situations is fundamentally biased towards internalizing.

Secondly, there are psychological reasons for internalizing and not externalizing. The firm, following Coase’s argument and definition, is about control. It is through control of the production processes, established by the set up of “open ended” employment contracts, the entrepreneur manages to outdo the market, at least in the short term.

It is reasonable to assume that the entrepreneur, a person who (at least initially) knows what to do, seeks control. (Control should here be interpreted as in “setting up production processes” or “organizing/arranging inputs in a specific way to make outputs.”)

This point can be further understood when considering the so-called endowment effect. The theory of the endowment effect states that a person tends to place a higher (subjective) value on objects they own than in “desirables” they do not [yet] own. Ownership is a form of control – the property right is the right to control the owned object, to be the ultimate decision-maker for what is to be made of the property (at least with respect to other people).

Would it not, considering the endowment effect, be reasonable to assume there is an endowment effect in firms too? The entrepreneur, again using Coase’s definition of the term, seeks and establishes control of the production process through founding the firm. The control of the production process through the firm is a form of ownership/control, and thus we should be able to safely conclude that there is a psychological tardiness to externalize – the entrepreneur should thus hesitate to give up control, and thus ownership.

What we see here is that there should be a psychological bias towards control, hierarchy, and firm-building as opposed to market solutions. And there is also a bias (see 1 above) regarding information: the entrepreneur can more easily foresee the effects of internalizing whereas the effects of externalizing are difficult, if not impossible, to foresee.

Of course, the entrepreneur can overcome such information problems in the case of externalizing, but that would undoubtedly lead us back to transaction costs and the Coasean argument for the firm.

Can we then conclude that there is an overall market bias towards structure and control rather than decentralization and competition? At least the two aspects discussed above – the information problem and the endowment effect with respect to the internalizing/externalizing decision – seem to suggest that the market “calls for” firms rather than independent contractors. This view, if true, fundamentally undermines the common understanding of the market.

Rules for the “Weak”?

Saturday, November 3rd, 2007

Have you ever made a request only to be bluntly turned down with the comment “sorry, but those are the rules”? Part of this phenomenon has already been covered in my comment on the Nuremberg Trials. In this post, however, I wish to discuss rules from another point of view: why do people wish to blindly accept and carry out orders?

I have consciously chosen the somewhat provoking title Rules for the Weak, but it is actually straight to the point. Thinking of business, some would say rules are there only to protect Capital and make sure the labor worker is exploited – breaking the abundance of rules leaves the worker totally in the hands of the manager or owner of the firm.

I don’t believe this view or “exploitation theory” is totally wrong, there are surely both managers and owners making up rules simply to make the lives of people working for them miserable. This does not, however, explain why people choose to work where there are rules – and especially not why quite many people choose to rely on the rules to escape personal responsibility.

Of course, the latter point can be interpreted as a choice made under the systematic threat of state capitalism where most sound alternatives have effectively been precluded from the market. Also, the fear of punishment might very well make people “blindly” adopt whatever rules available to protect themselves from possible harm.

These are all good points, and in the contemporary economic system – whether you call it a “free market,” “state capitalism,”"state socialism,” or whatever – I would say they are valid arguments. But even though they are valid, I don’t think they explain the magnitude of the phenomenon.

The opposite view offers another explanation to why people “hide” behind rules: the rules of businesses are simply there to protect the working men and women from taking on responsibility for decisions they do not have mandate to make. The strict following of “procedure” is thus protects the worker – management indirectly takes responsibility through formulating rules that employees have to follow, and thereby alleviate workers of responsibility they don’t want and cannot take on.

I would personally think this is how many managers think – they make rules in order to control what is going on in their organizations. They may not always do it to protect the workers (rather, they might do it to control their actions), but the chain of actions isn’t hard to believe. It probably explains, at least in part, why there are rules for workers and employees to follow – and perhaps even why employees refer to the rules rather than try to find the best solution in the particular situation.

However, there is reason to believe the adoption of rules isn’t one-sided and one-way. It is not only the case that people are forced or lured to “blame” the rules. The rules aren’t used in everyday business only to control or protect them. It is also the case that people choose to abide by rules and regulations and readily refer to rules as a way to avoid taking personal responsibility. This is not only the case in business while carrying out one’s work, but also in private interaction.

People like to hide behind rules and regulations. They find satisfaction in evading personal responsibility – especially if they at the same time can can make someone else worse off.

This is not a general rule for “everybody,” but there are quite a few people gladly taking on positions where they get the “power” to make decisions that affect other people but don’t have to take responsibility for the effect of these decisions.

It should now be clear that I am not talking only about a phenomenon among workers and people in “weak” positions. Rather, I am talking about a human phenomenon that has nothing to do with the person’s situation or social status. A wide variety of people are part of the same phenomenon; they gladly make decisions that they know they will never be held accountable for. This is especially common in politics – politicians is the only group of people I can think of in which almost every member acts this way.

Back to the title of this post: the word “weak” does not refer to the direct situation in economic or social terms. I do not mean weakness as in absence of power or absence of influence. It does also not mean weak in the sense “not strong” or “not intelligent.” Weakness, rather, is here meant as a state of mind and feeling of confidence. As I have written elsewhere:

Only people not able to grow tall from their own efforts and achievements seek to subdue their fellow man; only people not being able to find comfort in their own mind seek to silence others; those who are unable to produce their own wealth aim to confiscate the wealth of others.

The same kind of people find strength in making other people weak, they enjoy making other people miserable – at least if they themselves can avoid personal responsibility. This is a state of frailty in body and mind, a lack of self-confidence, a weakness.

This is where the previous post on the Nuremberg Trials comes in. In the Trials each and every individual was held accountable for his or her actions – no matter if they were ordered or if they were threatened to carry out their actions. Acting means gaining responsibility for you action, and the converse is equally true: not acting makes you responsible for you inaction. This was the morality that was guiding principle in the Nuremberg Trials (it was at least the principle used by the victors of the war to legitimize continued killings of the losers).

Whether this was the common view on morality in the 1940s or not, this view has no doubt been diluted since then – not many would acknowledge this morality or principle steadfastly. The number of “weak” people, in the sense discussed above, is increasing and the number of principled proponents of individual responsibility is decreasing fast.

I personally hold the state responsible for this undermining of private morality. The state feeds off disconnecting action and responsibility. Where action does not cause responsibility the state claims power to “correct” disequilibrium. And the state continuously asks the citizenry to increase its powers so that it can take responsibility for people’s actions. The state ardently asks to be of service – to alleviate people of their responsibility.

But responsibility, even though it often is made to sound like a curse, is synonymous to liberty. Where there is no responsibility there can be no liberty – where no one takes responsibility for their actions, no one can experience the liberty to make choices. If no individual is held accountable and responsible for his actions, every individual’s range of possible actions is necessarily restricted.

It should thus not be surprising that the number of people “hiding” behind rules rather than standing tall and taking responsibility is increasing. The numbers are most likely increasing at the rate our liberties are restricted. And the state is growing at the same speed, always asking for more.

And it is a slippery slope: as soon as an individual is relieved of his or her responsibility, situations arise where someone else has to pick up the bill. This unfairness and injustice is used as a catalyst for the state – as soon as such injustice arises and becomes known the people will face the following:

1) someone will call for the state to “help them out,” and
2) the state will ask for powers to “make sure” such injustice will not arise in the future

Many will, of course, agree that such injustice is unfair and awful and must be avoided. Most will sympathize with the former and see the latter as a “solution.” The result? A society in a position even further from the liberty–responsibility equilibrium; a society facing more frequent and more severe injustice; a society with a larger state.

The trend is very clear and society has moved in only one direction throughout the 20th century: towards limited responsibility and restricted liberty. I have called this century of world wars The Endarkening, an era of anti-reason, anti-rationality, and anti-liberty. This era has no doubt continued in the 21st century.

The number of people “hiding” behind rules, regulation, and procedure is increasing – and it will continue to increase. The number of times you face someone totally unable to understand you or your situation, while blankly and bluntly referring to “the rules,” will also increase. They may be weak, but they are in a position of power and they intend to use it, it is the only way they can feel strong – through subduing you and making you subjected to their “good will.”

This is not a phenomenon that is limited to a few – it is everywhere and growing: The person “unable” to help you out because they were supposed to have closed “a minute ago;” the twenty-something guy in the convenient store refusing to sell a six pack of beers to a 77-year-old who refuses to show ID; the construction company not taking responsibility for substandard “death trap” buildings because the followed “the law;” the food producing corporation selling poisonous food but following FDA regulations; politicians getting rich from screwing the taxpayers while following the “moral code.”

The actions and situations are different, but the principle is the same. These are weak minds at work, finding ways to elevate themselves at others’ expense. They find pleasure and fulfillment in seeing others suffer while avoiding responsibility through blaming faceless “rules.”

The rules are for the weak, but not in the sense it is usually understood. The rules are not established to protect people in need of help and support. No, the rules are there for the weak-minded to avoid having to take responsibility for their actions – the rules are there for them to elevate themselves at our expense. They need to rules to feel superior, to me “super-human.”

Why? They cannot stand the thought of being one of us, the same as everybody else. And they are prepared to do whatever it takes to get the high of a sense of power, to be taller through pushing others down, to replace the feeling of discomfort with an artificial sense of being needed. Even if it kills the rest of us.