Economic Recessions

Economic Recessions Post 12/22/09
With the failure of Copenhagen (my MAPSBLOG post), it’s time to start thinking about serious depression, causes and strategies for when it gets worse. Click on, if you want. This may be my last post of this certain style as I’m considering changing the blog to be more real-time deadline appropriate. Hopefully a well-researched and justified account of the times we are living in as Americans right now, click:

Paul Farmer, Haitian Doctor for the Poor

From his (great) biography, Mountains Beyond Mountains, the character of Paul Farmer:
“Ophelia thought that Paul had a fairly complex personality, built of oppositions — a need for frenzied activity that verged, she though, on desperation, and a towering self-confidence oddly combined with a hunger for affirmation. She thought she understood; he took on more than he could fix, so of course he wanted reassurance. And yet he also seemed “terribly simple.” She thought he had never experienced true depression, a freedom so enviable she almost resented it. It was as if in seeking out suffering in some of the world’s most desperate locales, he made himself immune to the self-consuming varieties of psychic pain. He’d told me back in Haiti, I may be a more sunny, cheerful person than you. No one believes that I’m cheerful because of what I say and write, but I only say and write those things because they’re true.” He was often sad, of course, but it didn’t take much to cheer him up.”

Paul Farmer has affected change in thousands, and prevented probably over a million deaths in his work with Multiple-drug-resistant Tuberculosis, mainly in the poorest areas.
Questions to think about:
1. Is the quest for perfection always a good thing? What negative character consequences do leaders sacrifice in order to solve immense problems bigger than themselves?
2. If you were [Paul Farmer, Brett Farve, Che Guevara, Indira Ghandi] and had the chance, would you jump off the treadmill? or Be at the top of your game in an international world-scene, even if it necessitates being stressed and demanded under the eyes of a million people?
3. Would you write your own biography? (or press releases..) Or let someone like Tracy Kidder follow to represent your legacy in print? What are some advantages and disadvantages to either way?

-Eddie Miller
BU ’10

SO242 students, chime in!
Systems Change Visionary

If I was..

A historical figure= I’d be a pirate.
In pre-war Germany= I’d be a military strategist for the Western Front.
In colonial America= Would believe in Manifest Destiny.
A farmer= my farm would be the external manifestation of my soul.
Married= I’d be a good father.

I’m a dreamer..

International Trade doesn’t work for poor people

My mind was blown today with a critical fact of Economics.

Returns to scale are a market imperfection in competitive markets.

The entire theory of competition, markets, and trade is based on the assumption of constant or decreasing returns to scale. This concept defines all trade theory, and largely defines the policy that affects entire countries and allocation of the great bounty of the world’s resources.
But returns to scale are a fundamental aspect of international business. Returns to scale, the idea that cost is cheaper as a firm produces more, is what leads to giant consolidated multinationals, concentrated market power (and lobbying clout), and factory agriculture. These are the industries that dominate in foreign countries, the ones that can take advantage of returns to scale. In fact, when we tell developing countries to open themselves to foreign investment, it’s these types of industries that are built.

Governments acting for free trade is acting for industry.

Then we have returns to capital. The people who own more, are more likely to grow. What if allocation of resources is originally uneven? And information is uneven? That might lead to initial conditions being exaggerated in the form of country inequality: rather than poor countries being able to catch up they are already behind on the big scalable high-wage jobs.

What about comparative advantage? Poor people have no comparative advantage. There is no perfect awareness among non-Americans, as Winters et. al write “there is evidence that poorer households are less able to protect themselves or take advantage of positive opportunities by trade reform” (emphasis mine). Who produces these comparative-advantage goods? Savvy foreign entrepreneurs who CAN take advantage of opportunity. For them, they see cheap labor. And bring in technology that raises total country output/head. The poor not only lose what they were doing to import competition, but get unskilled, low wage jobs, the benefits of which go to capital owners and middle men who understand international systems, and their resources are used more intensively, not for them. Inequality is exaggerated (returns to scale, again) and most of the profit is siphoned into foreigners hands or reinvested in growth (capitalists are rarely satisfied to just make a profit). For what end does this growth aim? “Those that do benefit directly increase their input consumption, production, and consumption of goods and services.” The winners get to consume more. But CEOs and developed countries consistently score the saddest on international surveys! By making money, the poor remain a given (their wage will increase once everyone in the world’s does…) and externalize the things that do matter in the name of increased world consumption.

Jobs do not equal growth. Poor are not creators in capitalism. Those who earn more do not know happiness.

All free trade is based on fundamental assumptions. Decreasing returns to scale is one of them. In International Economics, everyone has perfect awareness of opportunities, and access to international demand if your idea is good enough. Unfortunately they’re stuck behind learning curves, and we tell them not to subsidize their domestic industry. This dynamic inequality impacts thousands of millions of people; the international flow of all goods and capital is based on a lie.

How can this fundamental feature be overlooked at phase 1 of Economic theory? How can the concepts of increasing returns to scale and market power be an oversight before any microeconomics graph is drawn? This changes everything.

I don’t know whether to cry or be angry at the institutions we’ve created. Thousands of people are starving, while their countries make exports for rich people. Poor people are told they can’t farm, because rich farmers and plantation owners are better at cutting costs. Poor people are not creators. And helping them isn’t profitable for business. Then we’d have to pay them more for our jobs.

-Eddie Miller
Boston University
A Global Organic Mindset: eddiemill.wordpress.com/

Talking about end-of-life care

There’s a national movement for bloggers to convey the message of just dying to readers. This is a topic that hits home for me as I’ve seen people dying, but is usually something we don’t talk about. Basically, the question I want you to ask is
“What do you want us to say if you can’t speak for yourself and need care?”

This brings up a couple related issues, namely
1. Could a loved one correctly describe now how you’d like to be treated in the case of a terminal illness?
2. Have you written a living will, appointed healthcare power of attorney, or an advanced directive?
3. Do you know about Hospice possibility for chronically dying or elderly care?

I hope this message finds you able to bring it up at night when there’s a moment.

For more information:
http://engagewithgrace.org
Globe article about the movement:
11/26: ‘Talking turkey about death’
-Eddie