Category: Public Policy

A recent NBER paper, “Distributional Effects of Globalization in Developing Countries,” by Pinelopi Koujianou Goldberg and Nina Pavcnik examines some effects of trade liberalization on low-skill workers.

Les Picker summarizes the findings, “Not surprisingly, the entry of many developing countries into the world market in the last three decades coincides with changes in various measures of inequality in these countries. What is more surprising is that the distributional changes went in the opposite direction from what the conventional wisdom suggests: while trade liberalization was expected to help the less skilled, who are presumed to be the relatively abundant factor in developing countries, there is overwhelming evidence that they are generally not made better off relative to workers with higher skill or education levels.”

There’s a lot more here to digest and the article has some predictably necessary nuances and caveats, not least of which concerns the problematic elements of trying to find a causal link between temporally related phenomena: “The authors’ findings suggest a contemporaneous increase in various measures of globalization and inequality in most developing countries, although establishing a causal link between these two trends has proven more challenging. However, the evidence has provided little support for the conventional wisdom that trade openness in developing countries would favor the less fortunate.”

It’s one thing to say that globalization proportionally rewards more highly educated and skilled workers relative to less educated and skilled workers. This by itself is not obviously unjust, and indeed, it seems to pass a basic sense of justice that jobs that require more skills and training ought to command a higher wage. Maybe a system that distributes more unevenly according to a measure of merit such as education or skill-level is more just than another system which is more equitable in purely distributive terms.

That said, it’s quite another thing to say that low-skilled workers are not made better off in absolute terms by globalization. I’m inclined to think that we shouldn’t be so concerned about relative disparities as we are by comparing in absolute terms the state of the working poor under systems of liberal versus illiberal trade.

If the working poor are better off under a liberal trade regime than an illiberal one, and higher educated workers are paid relatively more, there is a simultaneous increase in the poor’s immediate economic prospects as well as a relative increase in the economic incentive to improve their skills.

But his latter point only is effective in a situation where labor mobility is a real option, and as the NBER paper points out, “the strict labor market regulation that many developing countries had in place prior to the recent reforms is a potential source of labor market rigidities.”

So, for the promise of globalization to be realized, trade not only needs to be liberalized, but so does labor. Workers need to be free to move between sectors, both within and without national boundaries. As I’ve argued before in another context, we need both free trade and free labor.

For more on international labor mobility among low-skill workers, see this NYT piece, “Short on Labor, Farmers in U.S. Shift to Mexico.” See also, “New UN Report Underscores Ties between Poverty and Productivity.”

Blog author: kschmiesing
Wednesday, September 5, 2007

PowerBlog has in the past endorsed the concept of micro-loans as a market-friendly and thereby effective way of aiding the poor, especially in developing countries.

Now Arneel Karnani has attacked microfinance in a prestigious publication, largely on the basis of macroeconomic data.

Over at Business as Mission Network, microfinancier Peter Greer supplies a thorough and fascinating response to the charges.

Certainly any movement needs it critics and Karnani scores some genuine points, but it seems to me that Greer’s rebuttals are on the whole convincing. Micro-loans won’t eliminate poverty, but they play an important role in its alleviation—and in the rehabilitation of the dignity of the individuals who are able to take responsibility for their economic welfare.

It turns out that the Chinese were really thinking ahead back in 1979 when they implemented their one child policy. After all, imagine what their carbon emissions would be today if they hadn’t:

The number of births avoided equals the entire population of the United States. Beijing says that fewer people means less demand for energy and lower emissions of heat-trapping gases from burning fossil fuels.

“This is only an illustration of the actions we have taken,” said Su Wei, a senior Foreign Ministry official heading China’s delegation to the 158-nation talks from Aug 27-31.

He told Reuters that Beijing was not arguing that its policy was a model for others to follow in a global drive to avert ever more chaotic weather patterns, droughts, floods, erosion and rising ocean levels.

But avoiding 300 million births “means we averted 1.3 billion tonnes of carbon dioxide in 2005” based on average world per capital emissions of 4.2 tonnes, he said.

Well thank goodness we dodged that bullet. The link is from Hot Air, which notes that China’s strategy is “brilliant”:

Expect more of this in the future — human rights abusers being criticized by the international community for dubious practices and parrying the thrust with an appeal to the left’s tippy-top-most social virtue.

In a somewhat similar vein, yesterday brought word that all is not well in the world of leftist activism – a conflict is brewing between animal rights activists and the climate change crowd:

According to an interesting piece that ran in yesterday’s New York Times, animal rights groups like PETA (People for the Ethical Treatment of Animals) argue that being a meat-eating environmentalist–like Al–is an oxymoron… As writer Claudia H. Deutsch points out, the groups have compelling ammo to back it up: last November the United Nations Food and Agriculture Organization released a startling report revealing that the livestock business generates more greenhouse gas emissions than all forms of transportation combined.

The common thread in these stories? That humans are, simply put, a problem: we consume too much and emit too much in doing so, and if only there were a great deal fewer of us, things would get a lot better. It’s a very static worldview, allowing adherents to make no allowance for technological advances or scientific discoveries that may mitigate or entirely solve the problems that they fret about. In reality, it comes dangerously close to what Jordan Ballor described as The Matrix Anthropology, which is summed up by the words of Agent Smith, a villain in that film:

I’d like to share a revelation that I’ve had during my time here. It came to me when I tried to classify your species. I realized that you’re not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment, but you humans do not. You move to an area, and you multiply, and multiply, until every natural resource is consumed. The only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. A virus. Human beings are a disease, a cancer of this planet, you are a plague, and we are the cure.

Jordan concludes that post thusly:

This comes, of course, from a piece of software representing the machines who view humans as essentially batteries and feed the liquidated dead to the living. It is perhaps not the best anthropological foundation to adopt.


Here’s your broad, strong agreement among scientists:

In 2004, history professor Naomi Oreskes performed a survey of research papers on climate change. Examining peer-reviewed papers published on the ISI Web of Science database from 1993 to 2003, she found a majority supported the “consensus view,” defined as humans were having at least some effect on global climate change. Oreskes’ work has been repeatedly cited, but as some of its data is now nearly 15 years old, its conclusions are becoming somewhat dated.

Medical researcher Dr. Klaus-Martin Schulte recently updated this research. Using the same database and search terms as Oreskes, he examined all papers published from 2004 to February 2007. The results have been submitted to the journal Energy and Environment, of which DailyTech has obtained a pre-publication copy. The figures are surprising.

Of 528 total papers on climate change, only 38 (7%) gave an explicit endorsement of the consensus. If one considers “implicit” endorsement (accepting the consensus without explicit statement), the figure rises to 45%. However, while only 32 papers (6%) reject the consensus outright, the largest category (48%) are neutral papers, refusing to either accept or reject the hypothesis. This is no “consensus.”

And here’s your incontrovertible scientific evidence:

For a weatherman who has spent most of his career in front of a TV camera or radio microphone, Anthony Watts was a little concerned about speaking in front of dozens of scientists.
“Although I’m great at giving a weather forecast, I’m a little rusty giving a scientific presentation,” Watts said Friday.

During a scientific workshop this week in Boulder, Colo., Watts presented his research on hundreds of weather stations used to help monitor the nation’s climate.

The preliminary results show Watts and his volunteers have surveyed about a quarter of the 1,221 stations making up the U.S. Historical Climatology Network. Of those, more than half appear to fall short of federal guidelines for optimum placement.

Some examples include weather stations placed near sewage treatment plants, parking lots, and near cars, buildings and air-conditioners — all artificial heat sources which could affect temperature records…

…The research received new prominence, being cited in articles and commentary on global warming after a recent recalculation of global and U.S. temperatures at NASA’s Goddard Institute for Space Studies. After adjusting for a discrepancy between two weather data sets, the recalculated data showed that 1934 was the “hottest year” on record for the United States, rather than 1998.

Although the change was a slim fraction of degree, Watts expressed concern that the numbers being talked about by the media and the public may not be fully accurate. He said his goal is to ensure the science is correct.

It’s upon this type of evidence and strong consensus that climate change alarmists want to reshape society and create massive economic disruption. Are we really sure that’s a good idea?

Readings in Social Ethics: Walter Rauschenbusch, Christianity and the Social Crisis.References below are to page numbers.

  • This year marks the 100th anniversary of the first publication of Christianity and the Social Crisis, and a new centenary edition has been released this month by HarperSanFrancisco and includes responses to each chapter from figures such as Jim Wallis, Tony Camplo, Cornel West, Richard Rorty, Stanley Hauerwas, and others.

  • R’s introduction to the American situation: “We have now arrived, and all the characteristic conditions of American life will henceforth combine to make the social struggle here more intense than anywhere else. The vastness and the free sweep of our concentrated wealth on the one side, the independence, intelligence, moral vigor, and political power of the common people on the other side, promise a long-drawn grapple of contesting forces which may well make the heart of every American patriot sink within him” (xi-xii).
  • Religion, specifically Christianity, is a vital force in the coming social conflict between rich and poor: “It follows that the relation between Christianity and the social crisis is one of the most pressing questions for all intelligent men who realize the power of religion, and most of all for the religious leaders of the people who give direction to the forces of religion” (xii).
  • The writings of the prophets are the foundational biblical precedent for R’s program: “However our views of the Bible may change, every religious man will continue to recognize that to the elect minds of the Jewish people God gave so vivid a consciousness of the divine will that, in its main tendencies at least, their life and thought carry a permanent authority for all who wish to know the higher right of God. Their writings are like channel buoys anchored by God, and we shall do well to heed them now that the roar of an angry surf is in our ears” (2-3).
  • Juxtaposing ceremony and morality, R emphasizes that the prophets focused solely on moral conduct, not on external matters of divine appeasement: “The prophets demanded right moral conduct as the sole test and fruit of religion, and that the morality which they had in mind was not the private morality of detached pious souls but the social morality of the nation. This they preached, and they backed their preaching by active participation in public action and discussion” (11).
  • A summary of the significance of the prophets: “If anyone holds that religion is essentially ritual and sacramental; or that it is purely personal; or that God is on the side of the rich; or that social interest is likely to lead preachers astray; he must prove his case with his eye on the Hebrew prophets, and the burden of proof is with him” (43).
  • R calls for a transformative ethic: “Ascetic Christianity called the world evil and left it. Humanity is waiting for a revolutionary Christianity which will call the world evil and change it…. Jesus was not a mere social reformer. Religion was the heart of his life, and all that he said on social relations was said from the religious point of view. He has been called the first socialist. He was more; he was the first real man, the inaugurator of a new humanity. But as such he bore within him the germs of a new social and political order. He was too great to be the Saviour of a fractional part of human life. His redemption extends to all human needs and powers and relations” (91).
  • Anticipating the basis for the ecumenical movement: “Common work for social welfare is the best common ground for the various religious bodies and the best training school for practical Christian unity” (340).
  • The prophetic role of the pastor: “The ministry, in particular, must apply the teaching functions of the pulpit to the pressing questions of public morality. It must collectively learn not to speak without adequate information; not to charge individuals with guilt in which all society shares; not to be partial, and yet to be on the side of the lost; not to yield to particular partisanship, but to deal with moral questions before they become political issues and with those questions of public welfare which never do become political issues” (412).
  • An indictment of industrial society: “The force of the religious spirit should be bent toward asserting the supremacy of life over property. Property exists to maintain and develop life. It is unchristian to regard human life as a mere instrument for the production of wealth” (413).
  • An attack on property rights, broadly defined: “The most fundamental evils in past history and present conditions were due to converting stewardship into ownership. The keener moral insight created by Christianity should lend its help in scrutinizing all claims to property and power in order to detect latent public rights and to recall the recreant stewards to their duty” (413). Presumably stewardship practically requires some sort of property rights, however.
  • This would be news to missionaries around the world today: “The championship of social justice is almost the only way left open to a Christian nowadays to gain the crown of martyrdom. Theological heretics are rarely persecuted now. The only rival of God is Mammon, and it is only when his sacred name is blasphemed that men throw the Christians to the lions” (418).
  • It must be noted that R was writing before WWI and WII: “Humanity is gaining in elasticity and capacity for change, and every gain in general intelligence, in organizing capacity, in physical and moral soundness, and especially in responsiveness to ideal motives, again increases the ability to advance without disastrous reactions. The swiftness of evolution in our own country proves the immense latent perfectibility in human nature” (422).

There are a number of problems with Paul Krugman’s NYT piece earlier this week, “A Socialist Plot.” Krugman compares the American educational system to its healthcare system, arguing that because Americans aren’t inclined to disparage the former as a socialist threat, we likewise shouldn’t consider universal healthcare as a “socialist plot.”

“The truth is that there’s no difference in principle between saying that every American child is entitled to an education and saying that every American child is entitled to adequate health care. It’s just a matter of historical accident that we think of access to free K-12 education as a basic right, but consider having the government pay children’s medical bills ‘welfare,’ with all the negative connotations that go with that term,” says Krugman.

Krugman assumes that a defense of private versus public education is indefensible. After hypothesizing about making a case for abolition of public education, he purrs to his NYT audience who have never considered any practical option besides the government administration of education, “O.K., in case you’re wondering, I haven’t lost my mind.” Clearly to even consider getting rid of public education is insane.

First, let’s make a basic distinction between government mandates and government provision. The government mandates that I have car insurance before I take my car out for a spin, but I don’t sign up with the government for that car insurance. In the same way, drawing my own analogy, government could mandate K-12 education without being the primary provider of said education.

And as far as socialists plots go, government provided education should be ranked right up there. Even social observers who are largely sympathetic to socialism see the administration of public education primarily in terms of its utility as a means of social control rather than as a means of inculcating truth. Thus says Reinhold Niebuhr: “While education is potential power, because it enables the disinherited to protect their own interests by organised and effective methods, the dominant classes have suppressed their fears about education by the thought that education could be used as a means for inculcating submissiveness.” Whether the dominant class is the bourgeois or a politburo, public education as social control is a real concern.

Kristoff concludes, “We offer free education, and don’t worry about middle-class families getting benefits they don’t need, because that’s the only way to ensure that every child gets an education — and giving every child a fair chance is the American way. And we should guarantee health care to every child, for the same reason.” Socialism, apparently, is the American way. And middle-class families that send their kids to private schools aren’t “getting benefits they don’t need,” they are paying via taxes, often dearly, for education they don’t want.

There is an analogy between health insurance, car insurance, and education. It may be that the government mandate that all Americans have health insurance (although I doubt such a policy’s prudence), and yet not become the primary provider of such health insurance. Where market forces fail, nonprofits, charities, community groups, and churches must fill the gap. BlueCross and BlueShield is a nonprofit health insurance association providing coverage for about 1/3 of the American population. If need be tax credits and other incentives could be extended to promote private financing of such initiatives.

For more on the push for socialized health care in the US, check out this week’s commentary, “What’s Wacko about Sicko.”

Blog author: jballor
Wednesday, August 29, 2007

The relation of the creation account and the narrative of the flood in Genesis is a complex one. One of these linkages comes in the similarities of the mandates set forth by God in both accounts.

The sixteenth-century reformer Wolfgang Musculus identifies three mandates in the creation account (in addition to the specific prescription regarding the tree of life). The first of these is the procreation mandate: “Be fruitful and increase in number.” The second is the dominion mandate, flowing from the first: “fill the earth and subdue it. Rule over the fish of the sea and the birds of the air and over every living creature that moves on the ground.” The third mandate relates to sustenance of life: “I give you every seed-bearing plant on the face of the whole earth and every tree that has fruit with seed in it. They will be yours for food.”

Musculus notes that each of these elements are reiterated in the flood account. God says to Noah, “Be fruitful and increase in number and fill the earth.” He also says, “The fear and dread of you will fall upon all the beasts of the earth and all the birds of the air, upon every creature that moves along the ground, and upon all the fish of the sea; they are given into your hands.” And finally God says, “Everything that lives and moves will be food for you. Just as I gave you the green plants, I now give you everything.”

In this recapitulation the procreation mandate seems unchanged. The dominion mandate seems to be marked now by a relationship of antipathy, characterized “fear and dread” rather than benevolence. And thirdly, God expands the provision of human sustenance beyond plants to include eating of animals.

I’d like to focus on this third point, while noting that the change of the relationship noted in the second point is no doubt related to the inclusion of animals as fit for human consumption. Animals would have reason to fear being eaten now, for instance.

There’s been a great deal of reflection on the meaning of God’s adjustment of the creation mandate to include animals as the source of human food. Some commentators have focused on the need for the new human family to have ready sources of protein and nutrients that might not otherwise be available in the post-diluvian world. Related to this, if it’s true, as many vegetarians would have us believe that eating meat is unhealthy, it may be a way for God to ensure that the human lifespan would be limited: “My Spirit will not contend with man forever, for he is mortal; his days will be a hundred and twenty years.”

As I’ve noted in another context, the expansion of the food mandate to include animals is a reflection of the comprehensive corruption of the Fall. Sin has marred the created harmony of the relationship between humans and animals.

Here, however, I’d like to speculate on another aspect of the extension of this mandate to include animals. Given the nature of fallen humankind, focused on inordinate and idolatrous self-love (cor curvum se, as Anselm puts it), God may be testifying to the fallen-ness of the human/animal relationship and simultaneously providing incentive for fallen humanity to take an active and interested role in stewardship of the animal kingdom.

By linking human survival to dependence on animals for food, God has set in place a relationship that will tend to mirror, if even in a fallen and imperfect way, the original responsibility of human beings to exercise stewardship and dominion over the created order. Human beings now have a basic motivation from self-interest from survival to economic prosperity to “rule over the fish of the sea and the birds of the air and over every living creature that moves on the ground.”

As many economic observers have noted, a key way to ensure survival of a species is to commodify that species for human consumption in one form or another. There is no lack of cows in America primarily because there is an economic motivation for farmers to keep sustainable herds to meet consumer demand.

There is of course no guarantee that unbounded greed and short-sightedness will short-circuit the economically-savvy self-interest that manifests itself in sustaining a reliable and long-term source of animal products. For a case in point, see Eric Dolin’s new book, Leviathan: The History of Whaling in America (interviews here and here, reviewed here). While the whaling industry provided foundational means for economic development in colonial New England, it was a lack of perspective that allowed these populations to be hunted near extinction (see the case of the right whale, for instance).

The key here is note that enlightened self-interest, as opposed to base and short-sighted greed, manifests itself in an impulse to protect sustainable sources of animal products. In this way economic development and the protection of species are not in fundamental opposition, as so many environmentalists have construed laws like the Endangered Species Act.