Tuesday, May 31, 2005

When the bottom line isn't everything

My friend Chris Masse sent me the link to an interesting article at Science & Theology News. Professor Malone makes some excellent points, but I disagree with him about his term "noneconomic values." They're non-monetary values, because they still have an economic basis. Remember that economics is not just the science of money and its flows, or the flow of goods and services: most fundamentally, it's the study of human action and the consequences of human decisions. So ultimately Malone's reflections still come down to the economic saying, "People seek to maximize their own happiness for the least cost." Note that it's happiness, not purchasing power or wealth.

One of my friends prefers to patronize local businesses and avoid Wal-Mart (but he does go to Costco). He prefers that his money circulates among people he knows personally, and he doesn't contribute to the coffers of any large corporations whose policies are disagreeable to him. That's still his consumer preference. He most likely will spend more for the same basket of goods, but it maximizes his personal happiness. I factor in quality and service like anyone else, but the cheapest price is my first criterium. Let's say I can purchase something made in Mexico or Asia, and it's cheaper than something produced domestically. All else being equal, I'll buy the foreign-made product, and I'll hope the domestic employees go into jobs where they have a comparative advantage.

Isn't economic freedom wonderful? My friend is free to patronize whom he wishes, and I likewise can do business with whomever I choose. It's why I've come to support free trade -- on any level, especially internationally -- on a moral basis. There's no difference whether I engage in peaceful, voluntary trade with a local grocery store or a large retailer whose goods originated from abroad. Do you have the freedom? Under the same principle, why should I be hindered from trading with a merchant in Beijing, as long as the trade is peaceful and voluntary?

Professor Malone notes an important requisite for advanced consumer preferences: consumers can't really make these types of value judgments until they're relatively wealthy. Until consumers can afford to be more discriminating about the foods they buy and the businesses they patronize, it's a matter of survival.

Today at a barbecue, a few of my host's friends chatted about the (supposed) superiority of organic food, and how additives are giving us cancer (perhaps, perhaps not). But they're forgetting that in preserving our food, additives give us an abundance of it. Remember your Bastiat: abundance leads to lower prices, to an increase in relative wealth. Scarcity is the reverse: it leads to higher prices and a decrease in relative wealth.

They talked about how people "in the old days" died from "old age" and not from cancer. "Old age," however, meant dying from a weak physical condition, usually the direct result of less nutrition than we enjoy today. Diets a century ago incorporated a higher degree of fruit, vegetables and carbohydrates, but they had to. Meat was too expensive to consume like we can today, and the scarcity of protein meant weaker muscles -- particularly cardiac muscle. People just a century ago were generally less robust as they aged. They didn't live long enough to develop cancer, nor did they have the longevity required to worry about heart disease.

Which is worse, to die at an average age of 60-65, living feebly for the last half-dozen years, or to die at an average age of nearly 80, having to take cholesterol medication and other pills for 20 years? The answer depends on the person. I can't let it bother me that American society, in general, eats badly and doesn't exercise enough. All I can do is live my own life as best I can. Frankly, before Americans become a healthier and longer-lived society, I'd rather see the nutrition busybodies stop trying to legislate fitness.

Corporations are hardly "greedy" to add chemicals so they can sell more of their product. It's in their self-interest, of course, otherwise they wouldn't do it, but it's also in ours. Without additives, corporations couldn't sell as much food, and then there would be greater demand for food versus the available supply. Consumers would not be able to afford as much, not without cutting back on other things. And for the poorest people, it could mean starvation. None of us, not even my friend's senior citizen mother, had to live in a day when Americans literally starved to death.

In fact, the next time you purchase USDA Choice steak for $5 per pound (that's the sale price where I live), thank the coal that eventually pollutes our atmosphere -- it fuels the electric power plants that power the grocery stores, as well as your refrigerator. Thank the oil that, though it pollutes our atmosphere, fuels the 18-wheelers that transport goods across the country. Thank our "dirty" hydrocarbon fuels that power our great crop-harvesting machines, which do the work of a thousand hands for a fraction of the cost. It's all a tradeoff, as real economics teaches us. Environmentalists push for harsh regulations that will mandate clean skies, clean rivers and lots of preserved non-urban areas...but they fail to consider how expensive that world would be. Bastiat, in fact, would call them bad economists:
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.
On a related note, Don Boudreaux at Cafe Hayek noted that the "natural state" of living is pretty darn uncomfortable. One thing Dr. Boudreaux mentioned was having to use an outhouse, which I consider only marginally better than "going" in the middle of the woods. Our modern sanitation is far better at preventing the spread of disease. One example I like is Edwin Feuler noting that horses were just as unhealthy, if not more so, than exhaust-spewing automobiles. Not only that, but they were expensive too. I can't remember where I read this, but prior to the automobile, cities had severe health problems from dried horse waste. No one would clean it up, so it would stay on the street to dry up -- and then be blown around by the wind. My own little addition is that it would be trodden on, then carried around on the soles of people's shoes. Or their bare feet, which is an awful thought when one remembers how, prior to our modern convenience of running water, people bathed in tubs.

Modern conveniences have allowed us to live healthier, cheaper and better lives. It was sometime in the last year, after receiving my economics B.A., that I realized the Ba'ku homeworld in Star Trek: Insurrection is pure poppycock. As a quick background, the Ba'ku eschew "machines" (presumably electrical technology) in favor of a simpler life, one supposedly more in tune with nature. Such a society, with the leisure time that the movie depicts, simply could not exist. For example:

A few Ba'ku were shown tilling a field, which was far too small to feed a community of six hundred people. Even with the generous assumption of each Ba'Ku eating only one vegetable per day, that's still 600 vegetables to grow per year. Without machinery, with their limited labor force, they'd be hard-pressed to harvest enough wheat and pick enough fruit to feed themselves. The labor force is limited because some Ba'ku spend their time weaving things for artistic purposes; recall the handiwork that Anij proudly presented. Realistically, no Ba'ku would have enough free time to think of anything but hard agrarian work, let alone spend a few decades as artisans' apprentices!

Without machines, how could they not spend a great deal of time weaving clothes? Do they use non-electric looms, like the one Jacquard invented? Even so, are their cloth and thread made of some magical material that never wears out? Prior to the Industrial Revolution, making clothes was extremely slow and laborious. As Isaac Asimov noted in his Book of Facts, making shirts was itself never-ending: women often finished making new shirts by the time the current ones wore out.

The Ba'ku had a dam, whose concrete would have taken 600 strong men years to pour, mold, move over the wooded and hilly terrain, and construct. Who and how many had the unenviable and dangerous task of guiding the stones, and how many died in the inevitable accidents? Now consider that the Ba'ku had a lot of women and children who were physically incapable of helping construct the dam. Also consider that some of the men were needed for other tasks in the village, like farming and blacksmithing. So the manpower was even more limited, and it probably took decades to build the dam. Since they had been there for 300 years when the Enterprise crew arrived, it's no wonder the stone looked so new and not one bit weather-worn. The Ba'ku had likely needed most of the 300 years to complete the dam!

Who had the unenviable and backbreaking task of mining metal ore out of the ground? Who smelted it? Remember, no machines here. This covers everything from the dam's wheel to horseshoes.

Perhaps the women and children did the farmwork and weaving, leaving it to the generally larger men to do the more physical labor, but that doesn't appear to be the case. The Ba'ku children have plenty of time to play "arm hacky sack" and goof off in the hay. Realistically the children would have been put to work from sunrise to sundown, with little time left for education, let alone playing.

"We believe when you build a machine to do the work of a man, you take something away from the man." I completely agree. The machine takes on hard, drudging, repetitive, dangerous work. The man is left with a better standard of living: more abundance of goods, leisure time, greater health, and enough spare resources (both temporal and physical) to pursue artistic endeavors.

What a terrible, pitiable situation when machines do work for men.


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