Won’t Be Posting for a Month…

…because I’ll be in Dubai and Zambia (mostly Zambia) and will have little spare time nor frequent access to internet. Be patient while I’m away.


A New Kind of Toxic Asset

A new kind of toxic asset is coming from a surpassing place: a carbon credit exchange set up by the United Nations:

When the United Nations wanted to help slow climate change, it established what seemed a sensible system.

Greenhouse gases were rated based on their power to warm the atmosphere. The more dangerous the gas, the more that manufacturers in developing nations would be compensated as they reduced their emissions.

But where the United Nations envisioned environmental reform, some manufacturers of gases used in air-conditioning and refrigeration saw a lucrative business opportunity.

They quickly figured out that they could earn one carbon credit by eliminating one ton of carbon dioxide, but could earn more than 11,000 credits by simply destroying a ton of an obscure waste gas normally released in the manufacturing of a widely used coolant gas. That is because that byproduct has a huge global warming effect. The credits could be sold on international markets, earning tens of millions of dollars a year.

So since 2005 the 19 plants receiving the waste gas payments have profited handsomely from an unlikely business: churning out more harmful coolant gas so they can be paid to destroy its waste byproduct. The high output keeps the prices of the coolant gas irresistibly low, discouraging air-conditioning companies from switching to less-damaging alternative gases. That means, critics say, that United Nations subsidies intended to improve the environment are instead creating their own damage.

Since the United Nations program began, 46 percent of all credits have been awarded to the 19 coolant factories, in Argentina, China, India, Mexico and South Korea…Each plant has probably earned, on average, $20 million to $40 million a year from simply destroying waste gas, says David Hanrahan, the technical director of IDEAcarbon, a leading carbon market consulting firm. He says the income is “largely pure profit.”

Disgusted with the payments, the European Union has announced that as of next year it will no longer accept the so-called waste gas credits from companies in its carbon trading system — by far the largest in the world — essentially declaring them counterfeit currency.

Regulatin’ ain’t easy. People — and firms are owned and operated by people — respond to incentives. Money is always one of them, not because of greed, but because of deep and complex social development, which I’ve written about before. Money is always hanging around, providing an incentive to circumvent regulation in increasingly clever ways the more sophisticated the regulation becomes.

The Chick-fil-A Situation and an Economics Lesson

The economics lesson will come in a moment, but first I want to talk about the situation more generally. But before doing so let me quickly reveal my biases. I am decidedly in favor of same-sex marriage. I have a lot of gay friends. I walked in Seattle’s Gay Pride parade this year. I follow George Takei on Facebook. It’s pretty much the only issue that informs my vote — not the economy, or healthcare reform, or foreign policy. I’ve never heard an argument anywhere near cogent for denying this right to same-sex couples. I also don’t remember having ever eaten at Chick-fil-A — I don’t even know where one is if I wanted to. I will certainly not be eating there in the future.

But as always our discussion of the situation lacks the clarity and precision I prefer. First, let’s state what is obviously true. Chick-fil-A did not donate money to anti-LGBT organizations. “Chick-fil-A” is an abstract human conception. It cannot donate money, just as the table in my dinning room cannot. The idea of Chick-fil-A is useful as a shorthand in many discussions and analysis, and, indeed, has specific meaning and importance in the area of law. But let’s not kid ourselves by conjuring up imagines of everyone at Chick-fil-A gathered around a drumstick shaped conference table one Monday afternoon to determine where this year’s donations would be sent. Undoubtedly, a very small group of people somewhere relatively high up, if not at the very top, made the decision about how to distribute these funds.

I say this only because I fear a certain amount of persecution for those individuals unfortunate enough to be on the front lines of the company’s franchises. I know from first hand experience that many of us know relatively little about the companies for which we work. I would not be surprised if the fry guy, or the checkout guy, or the chicken girl knew nothing of these donations before the recent brouhaha. I say this realizing that the company is outwardly religious in its mission statement. But even if employees were aware of the donations perhaps we should still cut them some slack. I doubt they were attracted to low-level positions at Chick-fil-A because of the company’s questionable values. More probably these employees have relatively few options for employment and are doing the best they can to carve out a living. Sometimes people make tough choices when their livelihood is on the line, and I for one am not going to blame them for that. Sure, some employees share the views put forward by the company’s mission statement, but I’m keeping an open mind as to which employees these might be.

On the other hand, it does seem fairly clear that these donations went to organizations that are openly hostile to same-sex marriage. You can view a complete list of Chick-fil-A recipients here. With a little poking around it seems that promoting traditional family structures is one of the core missions of these organizations. And it is troubling that their budgets are now thousands or, in one case, a million dollars richer.

Opponents have reacted just as they should — protesting, sure, but more importantly not purchasing Chick-fil-A food products. People purchase items when the price of the product is less than the expected value (or utility) they receive. But value is not utilitarian in the strict sense. Embedded in value are all kinds of non-traditional forms of utility like aesthetics, the importance of the brand, and the moral principles of the company compared to the those of the purchaser. (That’s why Apple products can garner a premium despite having nearly identical hardware components). So clearly, using this all-encompassing definition, Chick-fil-A products have lost value in light of recent events. Some have pointed out that Chick-fil-A’s values have not changed for years; but, again, what has changed is the information available in the public forum about these values. Behavior, aptly, responds to new information.

Social movements are an underappreciated aspect of capitalism, but just as surely are part of the modern capitalist system. What is unrecognized by most participants in social movements, however, is that these movements can be very good for the corporations at which they take aim. I don’t mean in some vague sense relating to free publicity and so on, I mean in a real economic sense.

Remember that $5 ATM fee Bank of America proposed charging late in 2011? An online petition against the fee was started by Molly Katchpole, a part-time nanny, and quickly gained over 300,000 signatures, causing BofA to cancel the planned increase. This seems like a victory for consumers, and in some sense it is, but it’s also a victory for BofA because they learned something about the elasticity of their ATM services. The term “elasticity” is used by economists to denote the relationship between quantity and price. If the price increases do consumers cut back a lot, a medium amount, or not at all? A high elasticity means consumers cut back a lot when price goes up. I suppose something like chocolate would be a good example because there are so many substitutes for those who have a sweet tooth. A low elasticity implies the opposite. We might think of cancer drugs as falling into this category. You’re likely to make sacrifices in other areas of your life in order to continue purchasing your cancer medication even if the price, say, doubles. In this second case, there really are no substitutes.

Firms want to charge the highest price possible without losing customers — the price that maximizes profit. But figuring out what that prices is isn’t so easy. Sure, you could do focus groups, but nothing beats 300,000 consumers collectively screaming out, “That’s too much!” “No problem,” says the bank, “we won’t charge that much.” The information embedded in these social movements is extremely valuable. Now there’s a bigger question about why a company is raising prices in the first place — maybe they are losing money or have a poor business model more generally — but elasticity information about particular services can help steer structural reforms in the business and guide executives’ decisions about the best overall method to reduce costs.

The same holds true for Chick-fil-A and the information they were able to garner. The company now has all kinds of demographic data by region (based on franchise location) showing customer loyalty and political beliefs, and can adjust local marketing campaigns accordingly if they so choose. The company also now knows roughly what percentage of total product value is due to their corporate values.Turning to the macro scale, Chick-fil-A now knows how consumers at large will respond to future charitable giving.

Overall technological improvements have caused collective action to work more quickly. Now social movements can easily garner support in days and weeks instead of months and year. But increased technology has also sped up the response time of businesses and likewise increased the sophistication with which firms can analyze the inevitable stream of data that occurs when masses of consumers willingly reveal their preferences and elasticities for particular services.

On net it’s unclear whether the companies or consumers benefit. Perhaps the loss in customers more than offsets the value of the information firms collect. Or perhaps the lost revenue from not being able to implement a $5 ATM fee will lead to more devastating cuts in other areas. Because of technology customers were able to come together and quickly bridge the information gap. Within days, millions of BofA customers knew about the proposed fees and had their outrage validated by strangers across the country. On the other hand, perhaps in the absence of a social movement there would have been a steady leakage of BofA customers away from the bank, with a policy reversal coming only after many more customers had left. The quick response from customers allowed BofA to respond equally quickly, perhaps keeping many customers that would have otherwise left.

But even if particular businesses don’t benefit the industry as a whole surely does since, for example, other major banks can us the BofA experiment to infer information about the elasticity of their own ATM services. In the case of Chick-fil-A, consumers gave a signal to businesses throughout America about the consequences of certain types of corporate giving. BofA and Chick-fil-A were “first movers” in their respective business policies. The widespread response of consumers articulated all kinds of important information to firms throughout America. This information may even counteract the reasons behind the social movements in the first place.

The State of America’s Retirees

Via Economist’s View, a new study presented at a National Bureau of Economic Research conference examines the wealth of Americans 70 years old and older between 1993 and 2008. It uses data from the Health and Retirement Study, which gives retirees surveys every two years until their death.

On the bright side:

Between 1993 and 2008, it found, unmarried older individuals had median wealth of about $165,000 roughly a year before they died — a figure that includes current and future Social Security income, job-related pension benefits, home equity and financial assets. In the same period, the median wealth for continuously married senior citizens, roughly a year before they died, was more than $600,000.

Not bad you might say. But on the other hand:

[A]bout 46 percent of senior citizens in the United States have less than $10,000 in financial assets when they die. Most of these people rely almost totally on Social Security payments as their only formal means of support…

More than a little depressing. And as the article notes, this doesn’t provide much of a cushion to protect against a wide variety of shocks. Co-author James Poterba frames the policy implications like this:

“There is a lot of divergence in how people are doing,” Poterba says. Those disparities also complicate the public-policy issues relating to the new findings.

“One of the clear messages is that it is very hard to do a one-size-fits-all retirement policy,” Poterba says. “We need to recognize that, for example, if we were to substantially reduce Social Security benefits for those later in life, that there is a share of the elderly households for whom that would translate very directly into reduced income, because they seem to have accumulated little in the way of financial resources.”

In Defense of Child Labor (An Overly Pity Post)

“Child labor is evil. There should be regulations preventing children from working in factories, especially those of multinational corporations that are exploiting developing country labor. Children should be in school where they belong!” Say critics of child labor.

Unfortunately, in the real world when children don’t work in the formal sector they aren’t running off to school with their books in tow, ready to absorb math and literature lessons from the — let’s be totally honest — highly trained developing country teachers. They’re relegated to working in the informal sector like this charcoal slum in Manila:

Most parents are too poor to send their children to school, and they need the extra pair of hands to help augment the family income. The average daily wage for one worker is 150-200 pesos (£2-£2.50), barely enough to buy food.

Doesn’t look very pleasant. I’d rather have them in a factory. Yes, I know the argument is more complex, just something to think about.

Correction: I too would rather have them, not in a factory, but in school. Or doing pretty much any else for that matter. A single-shot regulation baring child labor probably isn’t the answer though. But I don’t often here the average anti-child labor “man on the street” offering much more. They are operating off of emotion and a genuine concern for the safety and welfare of the world’s poorest and most vulnerable. However, there is (much) more complexity to the story. We always have to ask what are the realistic alternatives. School isn’t always one of them and there are a lot of policy, economic, and institutional bridges to cross before that changes — and there is a “meantime” we have to deal with before we’re safely on the other side.

I have only scratched the surface of this issue’s complexity, but I won’t say any more for now since this is, after all, meant to be pithy.

Freedom is Boring, Censorship is Fun

…is the title of a (now several years old) series of photographs by Iranian artist Shirin Aliabadi. You can see some of the pictures from the series here. She has a new series (also several years old) called Miss Hybrid. The Reel Foto blog had great coverage, which you can read here. And here is a sample photo:

All of Aliabadi’s photographs play with the notion of female oppression and the opportunities for freedom and novel forms of “play” that exist in Iran (and perhaps in other male-dominated societies). Just a note, if you’re wondering about the nasal strip across the bridge of the model’s nose, it’s a reference to the nose bandages that many Iranian women proudly wear after having rhinoplasty. Iran is, surprisingly, often touted as the nose job capital of the world. This passage from a Chicago Tribune article is instructive:

Lili is typical of the women who believe in artificial enhancement. She has had her nose fixed to make it smaller and straighter–twice. She has had her eyebrows tattooed to darken them. And she has bought non-prescription contact lenses in four different hues–blue, dark green, light green and hazel–to accessorize her clothing and reflect her moods.

I like these photos because I think they complicate our sense of what oppression means and force us to think a little harder before speaking about a place that many of us have never — and let’s be honest, probably will never — travel to in our lifetimes. One person that did travel to Iran is Rick Steves, the famous Seattle travel guide writer. He wrote this about the country after his return:

From a Western viewpoint, it’s disrespectful (at best) to impose these regulations on women. But from a Muslim perspective, it’s the opposite: Mandated modesty is a sign of great respect. In the Islamic Republic of Iran, women’s bodies are not vehicles for advertising. You don’t see sexy magazines. There is almost no public display of affection. In theory, the dress code provides a public “uniform,” allowing men and women to work together without the distractions of sex and flirtation.

This point of view was echoed by a female Iranian (I think) guest on his radio program that I heard several years ago. A (male) Iranian professor I once took a MENA class from had similar thoughts. And yet, Steves notes that in a local survey 70% of women expressed a desire to dress less modestly in public.

We want these two ideas to be separate — the idea of freedom and oppression — but I’m not sure they are. I think they can exist side-by-side in a sort of paradoxical harmony. Undoubtedly, Iranian society is oppressive in some ways, but just as clearly it is freeing in others. This dichotomy is not unique, it exists just as strongly in the United States, though admittedly the relationship between the two acts differently here. And even within a country what is oppressive for some is acceptable, or perhaps even encouraged, by others.

I don’t mean here to be an apologist for misogyny. I simply mean to say that what constitutes misogyny is more contingent and complex than our normally quick labeling acknowledges. I want what is “best” — whatever that term means — for the women of Iran. But that’s the thing, to be sure different women want different things. And part of recognizing what comprises patterns of oppression must necessarily acknowledge this point. Iranian culture might not empower the women of Iran, but I think it can free them in some respects. Perhaps freedom without empowerment is no freedom at all, but neither is oppression truly oppression when it yields opportunities for freedom. Modesty is a double-edged sword, even if one blade is noticeably sharper than the other. And let us not ignore the more explicit improvement in conditions for women. For instance, free contraception available in all government clinics and a university population comprised of 65 women for every 35 men. I contrast this with the situation of women in Saudi Arabia. That sword, it seems, cuts only against women — and far too deep and true to boot. (Although hopefully this is the start of something).

I know how it sounds, suggesting that the seemingly dismal situation for women in Iranian has virtues. Why not say the same about slavery, or the pre-1920 era without voting rights for women in the U.S., or internment camps for the Japanese during WWII. How far can this disgusting logic be pushed? But those circumstances offer few redeeming qualities; in a country filled with Maximum magazines, the celebration of Playboy and Victory’s Secret models, and indelible stares from hoards of men, surely we can agree that modesty does. “Does it really?” a critic might retort, “If modesty is so virtuous why don’t American women willing choose more modest attire (and choose not to participate in scantily clad advertising)?” One answer is that cultures vary. Iran is not America, and there is a long way to go to get from 70% of women wanting to dress less modestly to anything resembling American sensibilities.

Many people — pop feminists offer boisterous jeers in this camp — blame Islam for the troubles of Iranian women. There are several problems with this argument. First, though I have no evidence, I get the impression that these critics are chiefly non-Muslim and have never stepped foot in Iran. They are, then, prime suspects of Edward Said’s Orientalism, and worst of all, many aren’t even aware of their sin. In fact, this ignorance is the sin. To some extent Said’s attack can be levied against nearly anyone writing about a foreign culture. And, besides, what are we suppose to do, stick only to ourselves, never venturing out of our domain of birth to offer advise or criticism or approval? But as the G.I. Joe cartoons I use to watch advised, “Knowing is half the battle.” Acknowledging the sin is the first step toward its remedy: humility. We should all spend more time critically thinking and examining our ideas and how our notions have been built up by social construction. In some areas pop feminism is deft at this task, but in this case it fails to live up to the challenge. I say “pop feminism” because academic feminism has long acknowledged this dilemma: the need to empower those women who are “oppressed” while simultaneously honoring their culture, society, and religion and our ignorance of it as outsiders. To say the least, it is not an easy endeavor.

Of course, I too, in writing this piece, am suffering from the disease of Orientalism so let me here acknowledge that fact and that as a result everything in this essay may be — how to say it politely? — horse manure.

But distrust of Islam also fails on further grounds. Namely, it fails to extricate “religion” from its allied but distinct bedmate “culture.” In reality the two are not completely separable, not even close, but what I mean to say is this: there is no one Islam. There are as many Islams as their are Muslims. Each person’s religion is shaped by their own life experiences, their personal relationship with God (to the extent they perceive communication with God), the way they interpret the Qur’an, and so on. Needless to say, there are Muslims throughout the world who both value and fight for women’s empowerment. Indeed, even outwardly Muslim countries exercise female oppression to varying degrees. The extent to which Islam is used as a tool, or an excuse, by the patriarchy of some male groups in Iran is an issue of culture and the ways that laws, social norms, and patterned behaviors within society have become fused with religion:

The veiling and seclusion of women, for which Islam is often criticized, is more a matter of folk practice than an intrinsic part of Islam. Although the Qur’an advocates sexual modesty on the part of women, it makes the same requirement of men. The social custom of keeping women veiled or behind closed doors is not specifically Muslim, but reflects traditional Middle Eastern concerns…Over the past century, many Muslim intellectuals have objected to the seclusion of women on the grounds that it is contrary to the tenets of Islam.

That passage was from Politics and Change in the Middle East: Sources of Conflict and Accommodation. It corrects many other misunderstandings about Islam — many of them about the religion’s relationship with women — in addition to the one above. Clearly, then, Islam is not to blame for oppression in Iran and, in my view, just as clearly notions of oppression are complex and multidimensional. This complexity suggestions caution in mass labeling such as “Women in Iran are oppressed.” While obviously true in some dimension, such statements do not lend enough contingency to our operational definition of “oppressed”; nor do they attempt in any meaningful way to honor the daily lives of women in Iranian society and their identity as Muslim; nor do they properly account for the importance in non-Western societies of foreign virtues (such as modesty), that while perhaps not empowering women, certainly give more opportunity for particular types of freedom and “play” than are widely acknowledged.

This view also assumes a population of millions of helpless Iranian women. Many of whom are, in point of fact, not asking for our help, but going about the much more mundane task of living their daily lives. We, however, being the good neocolonialists that we are, seem to be much more comfortable giving Iranian women the moniker of “victim,” presupposing the West as a necessary savior that, having already progressed substantially down the path of women’s empowerment, is at liberty to offer normative prescriptions to Iranian society at large. That Iranian women have in many cases followed the Western model voluntarily does not suggest that Western and Iranian women’s rights are coterminous, and certainly does not imply that the movement’s ultimate trajectory is destined to make anchor along side the USS Hillary Clinton. As such, the mother-knows-best admonishments directed to guilt “backward” Iranian men, strategically erode Islam’s “sexist” foundational teachings, and energize “oppressed” Iranian women are nothing more than a modern regurgitation of the taming-the-savage doctrine that led us toward a profound exploitation of peoples throughout Latin America, Africa, and Southeast Asia. Simple because “we” are doing nothing, does not mean that nothing is being done.

Lastly, such statements presupposes repression — again, as measured by Western ideals — is the primary concern of women in Iran and not improved economic prospects, ethnic or regional tensions, threats of war, education, or simply raising a family. This in a country with GDP per capita of just $12,000 a year (one-forth that of the US) and growing income inequality, a predominately Shia population surrounded by mostly Sunni neighbors that are often politically unstable, an oft-belligerent president in Ahmadinejad, a nearby country in Israel that has threatened bombing runs more than once, an extremely contentious nuclear program, and notorious membership in the “Axis of Evil.”  Like many countries there is plenty of worry to be spread around in Iran, which may or may not be directed toward securing “women’s rights” as conceived by Western observers. I don’t want to oversell the point, however, there are plenty of positive trends in Iran as this Brookings paper highlights (it also points out some worrisome developments). If you read academic feminism you will encounter much more on the subjects of oppression and Orientalism, both in agreement and disagreement with my thoughts.

I will end with what I found a thoughtful and provocative set of questions from UK’s online broadsheet The Independent in a piece by Katherine Butler. I liked that she acknowledged the complexity of Iran’s female fashion movement and hinted at the question of what Iranian women are giving up in order to push back against repression:

Are these Iranian women just expressing themselves like members of a youth subculture anywhere in the world, or are they intentionally building a new image, a different identity, one that is in conformity with and at the same time utterly at odds with the expectations of the repressively conservative theocracy in which they exist? And if it’s the latter, have they unwittingly fallen into another trap, mocking the shackles of chadors “manteaux” and hijabs but substituting them for the tyranny of perpetual grooming, dyeing, plucking, nipping and tucking, all to achieve a “Western” ideal of beauty?