Thursday Thoughts 2

I've been re-reading through Dan Ariely's book Predictably Irrational (review forthcoming). The chapters that have been most thought provoking were the chapters on self control and emotions. Research on emotions demonstrates the decision-making in the heat-of-the-moment is much different than decision-making in calm states. 

"The results showed that when Roy and the other participants were in a cold, rational, superego-driven state ... they always took the moral high ground ... They thought that they understood themselves, their preferences, and what actions they were capable of. But as it turned out, they completely underestimated their reactions." (p. 127)

"Of course!"you might exclaim. This is common sense to most people who have ever experienced regret. Anger leads to speaking sharp words. Lust leads to thinking in a selfish manner. Envy leads to hatred or making false idols. But, emotions can also lead to honorable action too. When coupled with the spiritual fruit of self-control we can sense that we are becoming impatient and act in an opposite spirit. We can sense the stink of our pride and act in humility. We can sense the needs of those around us and act in kindness.

This reminds me of a favorite observation from Dallas Willard, "Feelings make excellent servants, but terrible masters." Self-control is crucial for emotions leading to improved decision-making. But, in his research Professor Ariely stated that his experiments suggested we have limited prospects for changing behavior in emotional states across time. I think this conclusion overreaches. Instead, Professor Ariely should note that there were no experimental interventions made to help people improve their decision-making. Different interventions might yield different results in the future.  

But, Professor Ariely does offer a piece of advice that is quite useful and that is something your parents or grandparents also shared: Avoid situations where temptations exist (and I would extend that to avoiding lines of thought where temptations exist). 

Next Thursday I will discuss another topic related to self-control: commitment devices that help stay on the preferred course of belief/action.

Capitalism and Poverty

In 2000 the United Nations set forth "The Millennium Development Goals" in an attempt to spur international efforts to eradicate poverty, improve health outcomes, and promote gender equality. All the various goals are supposed to be met in 2015. The goals will not be met; however, there has been substantial progress on some dimensions ---progress that was not prompted by the Millennium Development Goals. Brett Schaefer and Terry Miller have a great article on National Review about the source of that progress. Also, in a recent speech at Georgetown U2 frontman Bono he remarked,

"Aid is just a stopgap. Commerce [and] entrepreneurial capitalism take more people out of poverty and aid. We need Africa to become an economic powerhouse."

The National Review article and the endorsement of capitalism from a rock star-humanitarian (not normal) prompts me to make this simple point: The leadership in these countries needs to unleash capitalism. What do I mean by capitalism? An environment where citizens are free to produce, consume, make investments, etc. without burdensome regulations that increase the cost of doing business. People in these communities already have problems. What capitalism does is coordinate these problems with problem solvers - and it does it better than any other economic system that exists.

No other economic system has generated more wealth than capitalism. In addition, there are a number of other benefits that flow from capitalism that are on the MDG list. For example, capitalism has been related to improving the treatment of women. For example, in the book Half the Sky Kristof and WuDunn write, 

"Microfinance has done more to bolster the status of women, and to protect them from abuse, than any laws could accomplish. Capitalism, it turns out, can achieve what charity and good intentions sometimes cannot." (p. 187) 

A friend at FSU is currently working on how broader economic policies are related to different female empowerment indicators. When she has a working paper I will post her findings on the blog. Another MDG goal that is addressed through wealth generating capitalism are the environmental goals. Yes, in the short run as countries became wealthier there would be more pollution. But, as those countries became wealthier they would begin consuming more environmentally conscience goods (This relationship is called a Kuznets curve). The logic is simple. When you are impoverished the environment is not a good that you pay a premium for. However, when you're wealthy you have extra money to spend on the environment. Finally, it should come as no surprise that as citizens become wealthier they spend larger portions of their income on health goods and services. 

Thursday Thoughts 1

"For whoever wants to save their life will lose it, but whoever loses their life for me will save it. What good is it for someone to gain the whole world, and yet lose or forfeit their very self?" (Luke 9:24-25, NIV)

Jesus presents his disciples with a curveball. A person who lives for themselves has chosen a path that results in death; but, a person who sacrifices their own path for God's path will gain life. Then, he follows with a beautiful common sense question that cuts to the heart of the matter.  

When two roads diverge man must choose. That means man must give up one opportunity for another. Economists call the foregone road the "opportunity cost". As a Christian I want to choose God's path; but, the alternate path seems so attractive sometimes. 

How do we come to the point in our faith where Paul was at in his letter to the Philippians? In particular, I mean when he wrote,

More than that, I count all things to be loss in view of the surpassing value of knowing Christ Jesus my Lord, for whom I have suffered the loss of all things, and count them but rubbish so that I may gain Christ (Philippians 3:8, NIV)

From personal experience my best guess is that when Paul magnified God other things paled in comparison. We magnify God in our lives when we worship Him and take actions that are in accordance with obedience, humility, and love. This leads me to wonder how other actions might alter our opportunity cost. How do spiritual disciplines like prayer, fasting, confession, etc. alter our opportunity cost (perception about the cost of what we're giving up compared to God's path)?   

The Pain in Spain

is falling mainly on the heavily subsidized "green energy" program. In my last post, I mentioned that I had flagged the "peak oil" conundrum in the Sustainability course. Furthermore, since Doug and I first heard the initial report, now several years ago, about problems in the Spanish solar/wind power industry, I have also been highlighting that as something to watch. Indeed, there is more news developing on that front. The link itself is from Walter Russell Mead's blog, but I appreciate the tip from Instapundit.

Peak and Peak

I hope some of my former students in the sustainability class have been following the recent news on oil production in the United States. The last time I taught the class I showed, from a couple of years ago, a glimmer that the path of U.S. oil output was turning upwards, in spite of the nominal historical track that seemed to follow the "Peak Oil" theory. Now, with some more years of data available, the trend is clear. According to the June 12th, 2013, Wall Street Journal, "U.S. crude oil production grew by more than one million barrels a day last year, the largest increase in the world and the largest in U.S. history."

 The problem with the "Peak Oil" theory is that it took a perfectly fine, narrow, engineering model of individual oil fields under ceteris paribus conditions and tried to turn it into a sweeping economic model that ignored the price mechanism completely. In fact, one could argue that "Peak Oil" became almost a theology or an ideology rather than it's original intent as a narrow engineering model.

Prices matter. They matter directly and they matter because they spur attempts at technological innovation. And, when technological innovation succeeds, that is itself a shock to the conditions of supply and demand. Ask the folks in places like Texas, Oklahoma, and North Dakota, which are leading the U.S. to become a rival of Middle East countries in terms of oil production.

And Now for Something Completely Shameless

Just the Facts Ma'am: A Case Study in the Reversal of Corruption in the LAPD has just been published by Palgrave, and is available in hardcover or Kindle versions on Amazon, here.

And Now For Something Completely Different Than Economics

NATIONAL TRANSPORTATION SAFETY BOARD
WASHINGTON, D.C.

FOR IMMEDIATE RELEASE

JULY 13, 2013

It  has come to our attention that a summer intern has exceeded his/her job authority by releasing phony, insensitive, vulgar and racist names in connection with the crew of the Asiana airplane crash in San Francisco. The NTSB wants to make clear that it does not tolerate such pranks, and that those responsible will be sacked.

Yura Moose
NTSB Public Affairs Spokesperson