What is you label?

March 2, 2009

Labels are for cans, not people.
~Anthony Rapp

I was having dinner last night with some friends, and the conversation moved to political stances, neo-hippies labels, and driving cars. Talking about left, centre, and right wings, one of my friends asked me how do I label me. “I am above labels” I answered, “everybody has a label” she replied.

According to one test I took in Facebook, I am a class-3 liberal. The test levels can classified you between a a Class-10 liberal to a Class-10 conservative. But I find more often than not that lot of  people like to put labels on themselves, and those labels, though providing a sense of belonging, limit their ability to think. I find people in the streets that join causes just because they are liberal, or because they are perceived as “just”, without further thinking. Can you be a liberal and a conservative at the same time? Can you be a leftist with a brain, and a rightist with a heart? Let’s ask ourselves the following questions:

  • Can you be pro gay marriage but against abortion?
  • Can you be socially liberal but fiscally conservative?
  • Can you support the efforts in Afghanistan but be against the Iraq campaign?
  • Can you give money to the World Wildlife Foundation while hoping that the guys at Greenpeace get soon real jobs?
  • Do you support welfare programs but are against a big government?
  • Can you drive a car but at the same time be an ecologist?
  • Do you think that a biker that rides on the side walk, run red lights, and go against traffic is actually worse person than a driver that obey the law?
  • Can you support genetically enhanced crops and still think that organic crops have a place on the market?
  • Can you be a meatarian but support vegans?
  • Can you work on Bay St (Canada’s Wall St) and still support the ideals of Mohammed Yunus about banking to the poor?

If you answer to YES to more than three questions, I welcome you to the unease world of thinkers that do not know all the answers, but actually may make a difference. The world is more complex than simple labels make us think!

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Talking with Perspective

February 28, 2007

The only way to make sure people you agree with can speak is to support the rights of people you don’t agree with.
Eleanor Holmes Norton

One thing that prevents me to join some organizations such as Greenpeace, J4MW, et cetera, is the radicalization of a great number of its members. In the other hand, the organizations perceived as all the evil that exist on Earth, are usually opened to its critics’ positions. Shell, the World Bank, the International Monetary Fund always welcome its most critics’ point of view.

Let’s take an example, In Davos, Switzerland, the World Economic Forum is regarded as a rendezvous of the rich and powerful, but the voices opposed to globalization are always heard; they even have got special events, like the Open Forum. In contrast, the World Social Forum, the anti-globalization counterpart of Davos, is completely close to anybody who wants to speak in favour of globalization.

When in the small village of Atenco, in Mexico, riots and violent anti-governments manifestation turned into criminal acts, J4MW supported unconditionally the criminals that led the demonstration, closing the doors to any voice that support the legal status and the government position. In similar ways, radicals at Greenpeace make even grassroots activist to draw themselves out of this organization.

In the sustainable movement, David Suzuki once declared that ‘anyone who owns a SUV can’t care about the environment’; but he has being more moderate since then, and he is regarded as one of the greatest authorities concerning the environment. In the Fair Trade movement, any research that indicates that fair trade is not sustainable in the long term, because it keeps people in poverty, is usually received with a lynch spirit by the grassroots activist.

The left is plagued by people who likes the social ideas, but don’t have the willing to research how well these ideas apply or how realistic they are. In many cases, people joining social movements do so in order to oppose globalization, pollution, free trade, but just for the sake of oppose them. How somebody can seriously support Chiapas’s egomaniac Marcos? After 12 years of ‘war’ the area he controls is even poorer than before, his solutions are completely unviable, his openness to dialogue inexistent, but a lot of leftist still support him. I for once abandoned his line after two years of policy inconsistency and bad poetry that characterize the Sub-Commandant.

The ideas that these organizations embrace are usually the ones that I will support: anti poverty movements, global warming awareness, justice for migrant workers, and human treatment to animals. Is the lack of pluralism and self-critic what drives me and, I am sure, most moderate leftist away from them. Some organizations are no more that umbrellas for all kind of socialist movements, that oppose in general all what comes from the capital’s owners, the multinationals, and the USA, but can’t come up to particular solutions. Compare such organizations full of wannabe hippies against real, humanitarian movements like Medecins Sans Frontiers, the World Wide Foundation, and Amnesty International. These are real, grassroots activists, really busy trying to make this a better world, with little time to criticise everything they are against to.

In the meantime, this is an organization that can count with my absolute support and blessing:


Running of the Nudes


Economic Law and the Green Consumer

October 11, 2006

Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth.
Oystein Dahle, former Vice President, Exxon, Norway

The leftist with brain knows that, for having success in the quest of a more equal world, is wise to use the economic law instead of trying to go against it. The rightist with hearth knows that he can still make a wad of cash while making the world a fairer place. Both can use the simple supply and demand law that we have been talking about.

Let’s have a given supply and demand curve for a product:

Supply and Demand

As we saw before, P1 is the current price that triggers demand for Q1 articles. The red square is the total revenue for the sale of the product.

They are some goods that are produced under strict quality controls, not only for the product itself, but also for the working conditions of the workers. The manufacturer/producer complies with environmental concerns, pays well for the job and allow the workers to share the wealth and benefits that the production carries.

Products that have less impact on the environment and follow social standards are desirable, but they are offered at a higher price than their counterparts. The organic products require more attention and are produced in smaller quantities. The fair trade products manufactures pay more to the workers that harvest or produce them and offer better working conditions. The premium can be as high as 200%, so it is hard to compete with the regular products.

So, for two bars of soap, we may have one that is biodegradable and other that is not. The former is $2.00 and the latter $1.00. Which one do you thing the vast marjory of consumers will choose, if the rest of the attributes are equal? The price difference will move most consumers to chose the non-biodegradable because cost half. That is simple and that is the way the world is. We need to find ways to sell the first bar! Enter Economic theory and marketing.

For encouraging people to buy the biodegradable bar soap we have several ways to go, first, we denominate it. We need to make clear that this bar is better than the other one because they may last the same and clean the same, but one is going to pollute the water and the other won’t. That is why Marketers created denomination such as organic, biodegradable, fair trade et cetera. The leftist with brains knows that Marketing can be a tool for promote over consumption but also for promote smart consumption.

So we need to map our target consumers, and studying marketing and sustainability, we find that there is a group called green consumers; the people that are willing to acquire a product that is better for the environment or that pursue social justice for that mere fact. They may not be interested in the cleaning properties or how long does the bar of soap last, but they are interested in the product because it is biodegradable.

There are 4 types of green consumers according on their activism and the willingess to pay more:

Inactive, who only would buy a green or social product if the price and properties are the same that the non-denominational ones.

Latent Greens, who are willing to pay more for the product if the properties (clean power and durability in our example) are the same than the others.

Green Activists, that may not be able or willing to pay more, or to travel the distance to the specialist store where the offer the product, but try to promote the product and try to buy it any time they can, when the budget and the opportunity allow them.

Green Consumer, who no matter what, will only buy the green product.

According to David Wheeler, the green consumers are distributed somehow like this:

Green Consumer

So, by branding our product and certifying it as organic or fair trade, we are pushing the demand for it in the green market, and the effect is, when pushing demand, that we can charge a higher price and still sell more.

Supply and Demand IV
That is using economic law and marketing for social causes! Next time, more on green consumers.


Wealth Gap and Ecological Footprint

September 29, 2006

The rich will do anything for the poor but get off their backs.
Karl Marx

I have left out something important before talking about green consumers and some other economic law’s application: The need of a more equal world. I know this may sound like some kind of leftist moralistic dogma, but there is an economic truth behind. Please keep reading.

In the middle age, all the countries were poor. I am not talking about poor for today’s standards, I am talking about lack of health, short life spams, no roads, no communications, illiteracy… the world was dominated by a few very rich people and the knowledge was guarded by few scientist and monks. This was the feudal system was on and everybody was in pretty much the same poor condition. Enters the bourgeoisie and this changes; a new class is born of merchants and traders. Then the industrial revolution created, in the 1700’s a new powerful class of industrial men and the beginning of the modern world.

These milestones didn’t end the disparity. The gap between the rich and the poor continued to growth and today remains an issue. As a rightist, you may say that yes, the gap is still there, but everyone is growing! The poor of today are rich when comparing with the poor of 100 years ago. All the countries are growing in the long term and people complaining are big girl’s blouses. You may even show us the World Economic Outlook from the IMF and point out a graphic showing the growth of almost all regions in the last 35 years:

Per Capita Income Growth

So, with the exception of Africa, everybody is growing! So, what if the Industrial Countries are bigger? Who cares?

The world is designed to hold so many people. We are currently 6 milliards (6,000,000,000) people. That is a lot of people! Now, the world surface that is able to sustain human activity is 10.8 billion of what we’ll call biologically productive global hectares, so there are 1.8 BPGHa per person in all the world. In North America, the average Mexican needs 2.5 BPGHa, the average Canadian 8.8 and the average US resident 9.6.

I did the test that the Earth Day Network has developed to calculate your personnel footprint. The results are sad for a poor recent grad!

Manuel's Footprint

So, my lifestyle is preventing at least two other persons to live with the minimum basic shelter, food and service. Of course, living in Canada, with the miserable winter, demands more resources that living in Costa Rica, but thit is what we get for living where the wind turns back. There are still so many places, like California, with milder weather conditions and 33 million cars for 35 million people.

So, the wealth gap is no more than stealing natural resources from the third world. The wealth gap is not sustainable and should be addressed before it is too late. That doesn’t mean that we all have to live like Gandhi to cut the gap, but there are more sustainable ways of living that, while keeping us comfortable, helps others to reduce their poverty.

You still don’t care?

Well, the wealth gap also means the following set backs for the rich economies:

  • Exporting social injustice,
  • Illegal immigrants and terrorism to other nations, as well as the goods.
  • Extinction, deforestation and social unrest

These problems affect us at home. Even if we dismiss all the implications of social injustice and inequity, the effects can be felt on our homeland.

 

 

 


Exercises on Fair Trade

September 22, 2006

 

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.

Margaret Mead

I will start now applying some of the economic theory I talked about in previous post, but before, maybe you are ready to start doing some research on Fair Trade, before I start babbling about it.

As early as 1867, Karl Marx wrote in Das Kapital about the exploitation of the bourgeoisie over the workers. R. Janssen (1997) wrote about the feasibility of fair trade as an alternative way of trading. Ian Hudson and Mark Hudson (2003) wrote about the need for consumers and producers to know each other and the importance of fair trade as a mean to recognize that a product has certain impact on the way its produced that the merely price on the shelves.

R. Mendoza (2000) and D. C. Zehner analysed the economies of fair trade and followed the route of the fair trade primes, being the first that proposed that fair trade is an inefficient subsidy transfer. Paul Rice has written a series of articles promoting fair trade from the humanitarian side, but since he is chair of Fair Trade USA his work is in favour and lacks critic on the system. Francisco van der Hoff has make contributions on the rules of pricing a fair trade produce, especially coffee.

James Bovard (1991) has called fair trade a myth and declares that it’s a barrier for commerce and a subsidy from the rich countries to the poor, while analysing the legal system of trade, barriers and tariff that rule the world. Brink Lindsey (2004) makes an analysis on how the international price of produce is affected by efficiency in some countries and propose that low prices are result of natural market rules and not clash of classes. Ken Peattie (2001) writes about the green consumer and cast a light on the shades of marketing for the social and ecological conscious.

If you are interested in the Academia, these lectures are very recommended and post both views of the same problem: the poverty and ways to correct the imbalance.May we all benefit from their research.


9/11 1973

September 12, 2006

“There is a new empire in town”

Laurence M. Vance

My September Eleventh:

There are times when the Right clashes with the Left. I am not talking about the academic clash, with an endless discussion about economic theory, or Human Rights. It is neither the usual clash in the elections times, or the demonstration against globalization in Seattle , Québec, Cancun.

I am talking of the darker times of the Right against the Left that warmed the Cold War. Once Upon a time, in South America, the people dreamt about a change. With 34.9% of the votes, Salvador Allende won the elections in Chile against Jorge Alessandri, who just got 27.8%.

Feeling that the close margin was not an impediment, Allende began to nationalize everything he could. He started with the land. The peasants invaded private property while the government did nothing. The copper mines quickly followed; Allende called an old decree from 1932, and the Socialist government started to nationalize the industry, affecting the powerful American interest.

Allende felt invincible, then he nationalize the copper mines of Anaconda and Kennecott. That was the point of not return. Richard Nixon decided to get ride of Allende for good. Edmundo Pérez Zujovic was assassinated by the socialist forces (Vanguardia Organizada del Pueblo), and the police did nothing. Allende ignored, maybe naively, maybe on purpose, all the economic law and international rights that he could used to better serve his cause and to create a real Social-democratic government in the Andean country.

In March, 1973, Allende lost the control of the congress, so he proceeded to veto all the new initiatives that could helped to save the regimen.

September 11 1973. A military coup, leaded by the CIA, took place. Bombarding Santigo de Chile, Augusto Pinochet took the power. Thousands of Chileans were tortured and murdered. 18 years of Right dictatorship followed three years of democratic socialism. The Right acted brutally and merciless. Chile had to wait until March 11, 1990, to elect a new president, the Social-Christian Patricio Aylwin.

The clash of Right and Left. USA served the bombs, Chile the deads. The justice was left unserved.


Supply and Demand and some Left Myths

August 30, 2006

“An economist is a man who states the obvious in terms of the incomprehensible.”

Alfred A. Knopf

In order to clarify some myths that both Right and Left proffer, we need to review some basics of economic law. I know you know them, so I will be brief and hope not to bore you to death. The most basic economic law is also the most ignored: Alfred Marshall’s Supply and Demand. The law is very simple, at a given price, the consumers are willing to buy so many articles:

sdpic1.jpg

This is call elasticity. As the price increases, the consumer is willing to buy less; as the price decreases, the consumer is willing to buy more. The more sensitive is the consumer at price changes, the more inclined is the line. The second part of the law is that, at a given price, the producers are willing to manufacture so many articles:

sdpic2.jpg

I talk about manufacturing, but of course this is also applicable to agricultural products and services. The process is that these two forces interact to define the price: Where the supply meets the demand is called equilibrium point or market clearance:

sdpic3.jpg

We can expand on this model. First at all, the lines are not infinite. There is a minimum price that the producer will ask in order to start offering the article or service that will cover the costs and yield a profit. There is a maximum amount that the producer can offers due to installed capacity, so, the producer line is limited in those ways:

sdpic4.jpg

The implications are the same for the consumer, there is a maximum possible price to pay for a product (let’s say, the total income that the consumer has available) and a maximum quantity that the consumer will get, even if the product is free (for example, who wants 2,000 kilograms of potatoes for his small urban apartment):

sdpic5.jpg

To complicate more the model, the line is not a line, but a curve. Elasticity tell us how the quantity of a product, produced or purchased, changes according the price. Let says we want to buy shirts to go to work, and the price of a shirt is $20, at this level, we will buy 3 shirts. The value of the shirts market is $60.

<>If scarcity comes and the prices goes up at $40, we will buy only one shirt because we want to wait if a sales comes or the prices go down again, in this case, the value of the shirt market is $40. Now let’s says that instead of scarcity there was overproduction and the price of a shirt goes down to $10; it is so cheap that now we want a different shirt for every working day of the week and two for going out the weekend and buy seven. Now the value of the market is $70:

sdpic6.jpg
The curve is more rounded in the first set of prices and is smoother in the second, as the total price increase get closer to out maximum budget. Elasticity is not the same along the curve, the higher the price, the more sensitive (elastic) the market. This of course is not always the case, some goods, like diamonds, increase the demand as the price increases, but remember, I want to keep it brief.

A final complication is that at certain level of prices, the curves may not meet:sdpic7.jpg

In this case, if the producer wants to sell, it will have to be between the ranges of P1 and P2, but will never sell the quantities desired, which will lead him to leave the market.

This one, as any model, is based in certain assumptions, the most important of all is that exist perfect information:

  • All consumers and producers know all things.
  • About all products.
  • At all times.

We will come back alter to this, but if the assumptions hold true, then we have perfect markets, and this model shows us several things that happen in perfect markets condition, that takes away some of the myths that dwell on the Left:

  1. Prices are set in the market, not in an obscure room by conspirators.
  2. The public is willing to pay the price. No one is forcing the price in the market. There is no need for price control.
  3. The producers are willing to produce the quantity Q at the price P, so there is no need for subsides or special considerations for the producers.

So, I know it doesn’t sound very socialist from my part, but in my next post, I will talk about the myth that the Right uses in some of its arguments: The existence of perfect information and perfect market conditions.