Kurtz-Fernhout Software
pdfernhout@kurtz-fernhout.com



Memorandum

Date: Sun, 04 Jun 2000 12:05:24 -0400

From:   Paul Fernhout
pdfernhout@kurtz-fernhout.com
Reply-To: unrev-II@egroups.com
Kurtz-Fernhout Software

To:     unrev-II@egroups.com

Subject:   Economics and the Garden of Eden

John -

You make many good points, but there are a few that I think needs elaboration.

John Werneken wrote:

There is a simple solution to the problem that some things are without ownership and hence tend to be treated poorly by the markets - such as species diversity, clean air, or unspoiled vistas. Give them owners. Then they will be given value in the market place and will be conserved, as all valued properties are.

However, a big issue here is external costs.

If I own "clean air" and I sell the right to pollute, and other people have a greater chance of getting lung cancer, I am passing on an external cost to the community. It is unlikely under today's law that I could be successfully sued for this because it is difficult to prove damages. So it is profitable for me as the "air owner" to kill people (statistically).

Another issue is perceived value of cash vs. a non-cash resource, which is often highly idiosyncratic to the owner and immediate needs.

Lets say developers want to pave the Amazon to build a large parking lot. I own 100% of the worlds biodiversity rights. They approach me, and say we'll give you $200,000 for the right to pave the Amazon. Imagine I have a whiny child who want to go to Princeton. I need the cash right now! Seems like a good deal. Who is hurt? Me? No! Maybe just future generations who never get various medicines or can enjoy nature. But, it is a profitable exchange in the light of the priorities of the resource owner. Granted, maybe The Nature Conservancy owner. Granted, maybe The Nature Conservancy http://www.tnc.org/ might have offered me more money in the future, but I needed the cash now. Plus, the remaining world's biodiversity is even more valuable since there is less of it, so my remaining asset may actually increase in value.

Think this is a silly example? It's pretty much what is happening right now as the remaining old growth forests in the USA are being cut down to give antiquated timber mills a few more years of profit before those mills are obsolete. You might argue timber companies might make more money out of using the remaining forest for recreation or harvesting new DNA, but they don't see that as their business, and they have an existing physical plant and cultural system based on cutting down forests. (By the way, the replacement monoculture "tree farms" with nicely spaced rows bear little resemblance in biodiversity to the original forest.)

Another real example is the destruction of the "state" owned environment in the old USSR by various factories. The government owned both the environment and the factories -- it just decided to sacrifice one for the other.

I don't see how replacing the state with an individual or corporation will make things better. Even within a corporation, perceptions may differ as to the value of a non-cash asset. For example, the Newton was way ahead of it's time, but Apple decide to kill it because it wasn't profitable to keep it up. Or for example, in the 1970's sci-fi movie "Silent Running",

http://starriders.net/sfmovies/silent.htm

...the Earth's remaining biodiversity is stored in habitat domes in "Pan Am" space freighters, and the decision is made to blow up the domes and return the freighters to commercial service (probably because that would be more profitable in the short term). Everyone goes along with this except one ecologist who resists.

I think preserving biodiversity for example takes social consensus, and when necessary, enforcing laws related to the public well being and "the seventh generation". Every fight to preserve biodiversity has been difficult. Creating the National Parks system in the 1930s and preserving places like Yellowstone was a huge political fight.

> Business is nothing but the desires of all individuals, expressed > autonomously and honestly in their purchasing decisions.

Business reflects the desires of individuals to the extent they can pay for goods and services. If you are a poor farmer in Ethiopia, "business" cares not a bit about your desires. This is a fundamental problem with markets. They reflect the interests of people with the money. That is why they need to be tempered with morality and laws.

There's a catchy song I heard on NPR once.

An example verse is something like: "Someone owns the water, someone owns the soil, someone owns the land, and someone owns the oil. Someone owns the sky, someone owns the trees, Someone owns my body but they can't own me."

The refrain goes something like: "Everyone's a criminal unless you got the money, honey".

Anyone know who the songwriter / singer is?

> Government in contrast reflects the decisions of a smaller group.

In theory, Government should reflect a broad community that is governed. In practice you may be right (especially given the lack of separation of business and state Eric points out).

> [Your general sentiment of the value of capitalism and ownership.]

In general, I think you are right. A market system has been involved in the production and availability of all sort of interesting goods and services. People do tend to take better care of resources when they own them. For example, it is often said that home owners take better care of them and their communities than renters.

This also has to do with feedback mechanisms as you mentioned. Christopher Alexander discusses this in his book "Notes on Synthesis of Form" where he gives the example of living in a mud hut vs. living in a skyscraper. The owner of the mud hut will patch a hole that causes a draft. The inhabitant of a skyscraper does not have access or understanding of the building's air circulation system. Further, the architects who designed the skyscraper will probably never (or only years later) get feedback on the problems with the ventilation design.

Both Christopher Alexander and Langdon Winner (in his book "Autonomous Technology") make the point that technical systems should be readily understood and adaptable by the inhabitants, so that they can be made more responsive to the inhabitants needs and prevent the tyranny of the infrastructure. Unfortunately, there is money to be made in supplying difficult to understand technical systems with proprietary parts which resist modification, because that keeps the "user" dependent on the "supplier", with a resulting continuous revenue stream for the supplier. As Eric points out, most bioengierring efforts for example work in this direction -- "terminator" seeds or plant requiring heavy applications of pesticides (i.e. "Roundup-ready Soybeans").

The issue is taking things to extremes, the difficulty of assigning external costs, and differences in perceived long term value of resources of a scale we can't comprehend [like nature].

It used to be considered profitable to enslave people. That is rarely overtly done now because it is now generally considered morally wrong. In part this is also because it turns out you can get more work out of a "free" person for less total cost than owning a slave, especially when the free person is part of certain types of organizations with capital for tools. Someday the same thing might be widely thought about destruction of biodiversity. And again, this will be in part because economically you can get more out of biodiversity than pavement or lumber.

What is economic to do? In part it depends on the laws. If it is illegal to kill or beat your slaves, it may be more profitable to employ them. If it is illegal to destroy biodiversity, it may be more profitable to use it for sightseeing, medical research, or attracting programmers to Seattle (the most profitable use of old growth forest in the Pacific Northwest so far -- too bad old-growth forest owners can't easily profit from it -- this is the reverse situation of "external costs" I guess: "external profits").

> "These people clearly did not have our relationship to the world, > they were of it and not its masters.

You may not have meant to imply this, but I think it is a dangerous assumption that we today are in any sense "masters" of nature. It is more like (I think I encountered this idea in Geologist Preston Cloud's book "Oasis in Space") humans have become a geological force. We can destroy nature, but that doesn't not mean we can rebuild it.

And, I would argue (to boil down Manual De Landa's "War in the Age of Intelligent Machines") the upcoming singularity involving intelligent autonomous machines will may with some probability (small or large?) leaves us with very little mastery of many things. Eric has a good point in suggesting we turn our attentions to building "Edens", however the inhabitants define "Edens". For me, that means creating decentralized resilient self-replicating infrastructure for life support and economic production.

Sincerely,


Paul Fernhout
Kurtz-Fernhout Software


Developers of custom software and educational simulations
Creators of the Garden with Insight(TM) garden simulator
http://www.kurtz-fernhout.com