Catallaxis

The Political Economics of Stephen Colbert

By Daniel O'Connor of Integral Ventures, LLC

Stephen Colbert, brilliant satirist, unrepentant frankenwordsmith, and charismatic host of The Colbert Report, has recently added another neologism to the English language: wikiality.  As strange as it may sound, this new concept, together with his previous creation, truthiness, can help us understand what's so wrong with the political economic dialogue in the United States.

Truthiness

According to Wikipedia, "Truthiness is a humorous term coined by Stephen Colbert in reference to the quality by which a person claims to know something intuitively, instinctively, or from the gut without regard to evidence, logic, or intellectual examination.  Mr. Colbert created this definition of the word during the first episode (October 17, 2005) of his satirical television program The Colbert Report, as the subject of a segment called The Word."

"By using the term as part of his satirical routine, Colbert sought to critique the tendency to rely upon truthiness, and its use as an appeal to emotion and tool of rhetoric in contemporary socio-political discourse.  He particularly applied it to President Bush's modus operandi in nominating Harriet Miers to the Supreme Court and in deciding to invade Iraq."

Of course, the only way to appreciate Colbert's satire is to see it for yourself in this Colbert Report video (turning off your browser's pop-up blocker if necessary).  As he later told the Associated Press, "you don't look up truthiness in a book, you look it up in your gut."  That is, unless you can look it up on Wikipedia, as I did... which brings us to Colbert's second great addition to the English lexicon.

The Three Lenses of Threat Perception

By Daniel O'Connor of Integral Ventures, LLC

Thanks to Jeff McIntire-Strasburg of Sustainablog for referring us to this LA Times op-ed piece that offers some insight into how people tend to evaluate the extent to which something like terrorism or global warming is a threat.  According to psychologist Daniel Gilbert:

NO ONE seems to care about the upcoming attack on the World Trade Center site.  Why?  Because it won't involve villains with box cutters.  Instead, it will involve melting ice sheets that swell the oceans and turn that particular block of lower Manhattan into an aquarium.

The odds of this happening in the next few decades are better than the odds that a disgruntled Saudi will sneak onto an airplane and detonate a shoe bomb.  And yet our government will spend billions of dollars this year to prevent global terrorism and … well, essentially nothing to prevent global warming.

Why are we less worried about the more likely disaster?  Because the human brain evolved to respond to threats that have four features — features that terrorism has and that global warming lacks.

What, in Gilbert's estimation, are the four features of perceived threats? 

1. they are the product of human intention
2. they violate our moral sensibilities
3. they represent an immediate problem
4. they appear suddenly or grow rapidly

Inconvenient Truth

By Daniel O'Connor of Integral Ventures, LLC

Last night, Karen and I saw Al Gore's new movie, An Inconvenient Truth.  It is, in my opinion, a very clear, compelling, and heartfelt documentary that profiles one man's authentic effort to educate people around the world about the need to deal with the global warming crisis. 

   

Thanks to the superb direction of Davis Guggenheim, the film offers an unexpectedly pleasant balance and interweaving of technical and factual analysis, moral and ethical challenges, and personal introspection and disclosure, with Al Gore speaking through all three of these voices in a manner that sounds completely authentic and genuinely above the deplorable politics of this controversial issue.  In philosophical terms a la the universal pragmatics of Jurgen Habermas, there is in this film a very effective differentiation and integration of validity claims in the three domains of what is true, what is right, and what is sincere--the critical ingredients of the shared understanding and coordinated action that is the apparent goal of this film.

World on Fire

This latest video from Sarah McLachlan is a powerful way to think about issues of price and value... specifically, the very different subjective valuations that can be associated with the very same objective price. 

Sarah chose to spend nearly all the money she would have used for a professional music video on a whole portfolio of life-changing goods for people in need of the fundamentals of a decent life. 

Thanks to uber-blogger ~C4Chaos for this video.

What is Right? Who Decides?

By Daniel O'Connor of Integral Ventures, LLC

Assuming for the sake of discussion that we can adequately define and measure degrees of economic allocation, distribution, scale, and depth, what can we say about right allocation, right distribution, right scale, and right depth?  Given the positive economic truths, what are these normative economic rights?  Who decides? 

Because the ecological economists have already put a proposal on the table for three out of the four normative judgments, it might be useful to start with this.  As they see it, economics must seek the appropriate means via market, state, and social processes to the desired ends of efficient allocation, fair distribution, and sustainable scale.  (Herman Daly, Beyond Growth, 45-60; Robert Costanza, et.al., Ecological Economics, 80-83)

Allocation, Distribution, Scale, and Depth

By Daniel O'Connor of Integral Ventures, LLC

One of the important contributions of the ecological economists to the overall economic dialogue has been their emphasis on this notion of economic scale, which they generally define as a measure of the physical volume of matter-energy throughput, or the efficiency with which the economy is using the sources and sinks of the ecosystem.  When they introduce the idea of scale, they typically do so in contrast to the more widely accepted ideas of economic allocation and distribution.  As they see it, economics must address the perennial questions of allocation, distribution, and scale, seeking the appropriate means via market, state, etc. to the desired ends of efficient allocation, fair distribution, and sustainable scale.  (Herman Daly, Beyond Growth, 45-60; Robert Costanza, et.al., Ecological Economics, 80-83)  Clearly, there are some value judgments being expressed in the crisp adjectives they choose to define their desired ends, so I will often adopt a more transparently normative, but deliberately ambiguous term like right allocation, right distribution, and right scale.

As I presented in Sustainable Growth, I think we can benefit from the recognition of a fourth facet to economic development: that of economic depth.  The easiest way to grasp economic depth is to imagine growth in economic output, absent any growth in economic scale (i.e., steady-state scale) and independent of any growth in money supply (so real, non-monetary output).  What's left is growth in economic depth, or the depth dimension of the growth in economic output.  We talk around the concept all the time without really defining it, using terms like knowledge economy, intellectual capital, experience goods, organizational learning, trust, and innovation, which are all just different components of this economic depth.  Anyway, as I have tried to demonstrate, the recognition of economic depth can reconcile the apparently irreconcilable visions of those who (accurately) recognize the ecological limits to economic scale and those who (accurately) recognize the potential for economic growth beyond these ecological limits.  Thus, we have to consider right depth in relation to right scale, right distribution, and right allocation.

This brings me to the critical question regarding the relationships among these four concepts: allocation, distribution, scale, and depth.  Can they be reconciled with each other and incorporated into a single model of the economy? 

Sustainable Growth: Irreconcilable Visions?

By Daniel O'Connor of Integral Ventures, LLC

In the opening chapter of his signature book, Beyond Growth, Herman Daly shares an unforgettable story from his days as an economist at the World Bank.  Having just listened to Lawrence Summers, then Chief Economist at the World Bank, make a presentation critical of the Limits to Growth thesis, Daly referred Summers to a picture of the economy as an open sub-system of the world's ecosystem, consistent with what I present below as Figure 1.  He then asked Summers if, given this picture, it might make sense to start thinking about the growth of the economy in relation to the natural limits of the ecosystem.  Dodging the question, Summers responded dismissively, "that's not the right way to look at it." End of discussion.

Temporal Conundrum

By Daniel O'Connor of Integral Ventures, LLC

We finally did it.  This past year, for the first time since the pit of the Great Depression, we in the United States managed to drive our annual personal saving rate below zero.       

What this basically means, on the surface, is that all of us together, as a group, spent every dollar of household income we had leftover after taxes, plus another half a cent that we must have borrowed.  Of course, some of us did manage to save something last year.  But all of this saving was more than offset by all the dissaving the rest of us did.  Of course, this wasn't a great surprise.  The trend has been clear for a good many years and I've even discussed it in some previous posts, like Saving Ourselves and Saving Themselves?

What does it mean for us?

EconRock: Every Breath You Take

We can all rest easy knowing that Glenn Hubbard, Dean of the Columbia Business School, is keeping both eyes on Fed Chairman Ben Bernanke.  Check out this hilarious video parody from CBS students that came to me via Karen Sella and Pure Land Mountain. 

Debt Trap

By Daniel O'Connor of Integral Ventures, LLC

On this last day of Alan Greenspan's extraordinary reign as Chairman of the Federal Reserve, many in the media have been reflecting on his legacy.  Judging from the dozen or so articles and television interviews I've seen in the past week, the mainstream media and their chosen pundits seem to regard it as a very positive legacy, characterized by strong economic growth, mild price inflation, and relatively benign unemployment rates.  The one point of concern raised by some is the troubling accumulation of debt throughout the economy, particularly in the past several years. 

While I am glad to see the media paying attention to this important economic factor, I think they are missing the essential point: given our current monetary system, economic growth and debt accumulation come hand-in-hand.