Archive for the 'economics' Category

Professor Alexandra Grutter, University of Queensland, sent me this:

The coral reef crisis: The critical importance of less than 350 ppm CO2

By Veron et al. 2009. Marine Pollution Bulletin 58, 1428-1436.

“Abstract
Temperature-induced mass coral bleaching causing mortality on a wide geographic scale started when atmospheric CO2 levels exceeded 320 ppm. When CO2 levels reached 340 ppm, sporadic but highly destructive mass bleaching occurred in most reefs world-wide, often associated with El Niño events. Recovery was dependent on the vulnerability of individual reef areas and on the reef’s previous history and resilience. At today’s level of 387 ppm, allowing a lag-time of 10 years for sea temperatures to respond, most reefs world-wide are committed to an irreversible decline. Mass bleaching will in future become annual, departing from the 4 to 7 years return-time of El Niño events. Bleaching will be exacerbated by the effects of degraded water-quality and increased severe weather events. In addition, the progressive onset of ocean acidification will cause reduction of coral growth and retardation of the growth of high magnesium calcite-secreting coralline algae. If CO2 levels are allowed to reach 450 ppm (due to occur by 2030–2040 at the current rates), reefs will be in rapid and terminal decline world-wide from multiple synergies arising from mass bleaching, ocean acidification, and other environmental impacts. Damage to shallow reef communities will become extensive with consequent reduction of biodiversity followed by extinctions. Reefs will cease to be large-scale nursery grounds for fish and will cease to have most of their current value to humanity. There will be knock-on effects to ecosystems associated with reefs, and to other pelagic and benthic ecosystems. Should CO2 levels reach 600 ppm reefs will be eroding geological structures with populations of surviving biota restricted to refuges. Domino effects will follow, affecting many other marine ecosystems. This is likely to have been the path of great mass extinctions of the past, adding to the case that anthropogenic CO2 emissions could trigger the Earth’s sixth mass extinction.”

Full report here: http://dx.doi.org/10.1016/j.marpolbul.2009.09.009

See also: http://blog.une.edu.au/klausrohde/2009/09/16/if-obama-cant-defeat-the-republican-headbangers-our-planet-is-doomed/

Two days ago I published a post referring to the fact that the
Nobel prize for Economics has been given largely to conventional economists with a “classical” neoliberal outlook. The prize therefore strengthened the belief that this branch of economics is “correct”. Politicians, as a consequence, were inclined to “privatize”, “outsource” etc. as a remedy for any problems. Anybody disagreeing was labelled an ignorant: out of touch with modern developments in economic theory. This year’s prize has now been given to two economists who have shown that “outsourcing” often is not the best way to go, and that community administered resources are often better distributed than privately owned ones. In other words, privatization and leaving everything to free markets are not always the best approach. - I arrived at the conclusion that free market economics has flaws, i.e. that each case in economy has to be treated individually, some time ago based on a comparison of ecological and economical principles. See my knol:
http://knol.google.com/k/klaus-rohde/free-markets-and-free-trade-ecology-and/xk923bc3gp4/86#

The “Nobel” Prize in Economics has been a very effective instrument in directing economics research into a certain direction, i.e. that of neoclassical free market economics. But, apparently, this is not sufficient. Why not, therefore ask for help from the Bible.

Nobel Prize for Economics

http://www.guardian.co.uk/commentisfree/2009/oct/08/economics-nobel-women-bailout-stockmarket

“The Nobel prize for economics may need its own bailout
“Nobel prize has been a useful tool not only to proclaim the conceptual advances supposedly made by “the dismal science” but also to encourage certain types of economic analysis and research. So its power extends beyond public recognition, altering the very production of economic knowledge.”

“The political effect of the prize in the profession has been undeniable. There has been overwhelming domination of neoclassical economics, to the exclusion of alternative streams of thought, with only a few nods in the direction of broader and more socially embracing approaches. This has encouraged more conservative approaches in research and teaching.
Monetarist and free market approaches have been disproportionately rewarded, often at crucial times….”

The Bible

In a recent post I produced some funny quotes from Heinrich Heine. The Huffington Post, from time to time, produces equally funny ones. Have a look at this one:

From: The Huffington Post | Rachel Weiner
First Posted: 10- 5-09 02:26 PM | Updated: 10- 5-09 03:38 PM

http://www.huffingtonpost.com/2009/10/05/conservative-bible-projec_n_310037.html

Some extracts (bold by me):

“Lo and behold, the Bible has gotten too liberal, according to a group of conservatives. And it needs a little editing.

That’s the inspiration behind the Conservative Bible Project, which seeks to take the text back to its supposed right-wing roots.

Yes, even scripture is not orthodox enough for the modern conservative. Not that it’s the fault of the author(s), exactly. The group cites a few reasons why the Bible is too progressive: “Lack of precision in the original language … lack of precision in modern language” and “translation bias in converting the original language to the modern one.”

So how can the Bible be conservatized? The group has proposed a Wikipedia-like group editing project. Some of the ideas would only bring the translation closer to the original. But others would fundamentally change the text.

1. Framework against Liberal Bias: providing a strong framework that enables a thought-for-thought translation without corruption by liberal bias

3. Not Dumbed Down: not dumbing down the reading level, or diluting the intellectual force and logic of Christianity; the NIV is written at only the 7th grade level

4. Utilize Powerful Conservative Terms: using powerful new conservative terms as they develop;defective translations use the word “comrade” three times as often as “volunteer”; similarly, updating words which have a change in meaning, such as “word”, “peace”, and “miracle”.

6. Accept the Logic of Hell: applying logic with its full force and effect, as in not denying or downplaying the very real existence of Hell or the Devil.

7. Express Free Market Parables; explaining the numerous economic parables with their full free-market meaning

Among the words to be eliminated: “government.” A conservative columnist at Beliefnet described the effort as “just crazy … like what you’d get if you crossed the Jesus Seminar with the College Republican chapter at a rural institution of Bible learnin’.”

Concerning the recommended Wikipedia style: I have commented on the serious flaws and biasses of Wikipedia in a knol:

http://knol.google.com/k/klaus-rohde/wikipedia-oder-knol-meinungsfreiheit/xk923bc3gp4/73#

Concerning the free market propaganda to be incorporated, is this blasphemous?

An article by Jonathan Freedland in The Guardian deals with climate change and the Copenhagen conference. Link here:

http://www.guardian.co.uk/commentisfree/2009/sep/15/obama-healthcare-climate-change-copenhagen

This summarizes the article:
“One year on, the world still looks to the US and holds its breath. The fate of a global climate treaty rests in American hands”

I would add that the totally irresponsible attitude particularly of the Nationals in Australia fits well in. Nationals = Republicans?

The worst aspect, a rich country expects the poorest to pay. After all, it is well established that most of the burdens will have to be paid by the underdeveloped world in southern Africa and Asia. So, why bother?

Links to my knols on parasitology, ecology, zoogeography, economics, philosophy and art can be found here:

http://knol.google.com/k/klaus-rohde/klaus-rohde-knols-english/xk923bc3gp4/69#

The list is continuously updated. Knols can be used as supplementary material for lectures.

In a previous post I drew attention to some people exposed by the present financial and economic crisis.

An article in the Guardian discusses 25 people (politicians, bankers, economists, etc.) responsible for or warning against the present meltdown. Alan Greenspan heads the list of the culprits, George Soros and Nouriel Roubini are among the warners.

See the full article here.


Here is what the article says about Roubini (bold by me):
Professor Nouriel Roubini¨Described by the New York Times as Dr Doom, the economist from New York University was warning that financial crisis was on the way in 2006, when he told economists at the IMF that the US would face a once-in-a-lifetime housing bust, oil shock and a deep recession.
He remains a pessimist. He predicted last week that losses in the US financial system could hit $3.6tn before the credit crunch ends - which, he said, means the entire US banking system is in effect bankrupt. After last year’s bail-outs and nationalisations, he famously described George Bush, Henry Paulson and Ben Bernanke as “a troika of Bolsheviks who turned the USA into the United Socialist State Republic of America”.

(more…)

Over the last several weeks I wrote a number of knols on ecology/zoogeography, ecology/economics, ecology/politics, parasitology, and philosophy, meant mainly for students and interested lay people. Some are in German, some in English. The English ones are listed below with links. Note that you can comment on the knols. Any suggestions for improvements are welcome.

Ecology/Zoogeography

The Latitude Niche Width Hypothesis

http://knol.google.com/k/klaus-rohde/latitude-niche-width-hypothesis/xk923bc3gp4/48#

How Many Species on Earth?

http://knol.google.com/k/klaus-rohde/how-many-species-on-earth/xk923bc3gp4/43#

Competitive Exclusion (Gause’s Principle)

http://knol.google.com/k/klaus-rohde/competitive-exclusion-gauses-principle/xk923bc3gp4/41#view

Evolutionarily Stable Strategies (ESS’s)

http://knol.google.com/k/klaus-rohde/evolutionarily-stable-strategies-and/xk923bc3gp4/50#view

The Paradox of the Plankton

http://knol.google.com/k/klaus-rohde/the-paradox-of-the-plankton/xk923bc3gp4/40#

Niche Restriction and Segregation

http://knol.google.com/k/klaus-rohde/niche-restriction-and-segregation/xk923bc3gp4/12#

Vacant Niches

http://knol.google.com/k/klaus-rohde/vacant-niches-in-ecology/xk923bc3gp4/8#

Effective Evolutionary Time
http://knol.google.com/k/klaus-rohde/effective-evolutionary-time/xk923bc3gp4/11#

Rapoport’s Rule

http://knol.google.com/k/klaus-rohde/rapoports-rule/xk923bc3gp4/6#

Thorson’s Rule

http://knol.google.com/k/klaus-rohde/thorsons-rule/xk923bc3gp4/5#

Parasitology

The Aspidogastrea, Morphology and Life Cycles

http://knol.google.com/k/klaus-rohde/the-aspidogastrea-a-parasitological/xk923bc3gp4/13#

The Aspidogastrea, Sacculinisation

http://knol.google.com/k/klaus-rohde/the-aspidogastrea-a-parasitological/xk923bc3gp4/15

The Aspidogastrea, Ecology

http://knol.google.com/k/klaus-rohde/the-aspidogastrea-a-parasitological/xk923bc3gp4/16

The Amphilinidea
http://knol.google.com/k/klaus-rohde/the-amphilinidea-a-small-group-of/xk923bc3gp4/21#

Politics

Games Theory (Nash Equilibria) in Politics

http://knol.google.com/k/klaus-rohde/games-theory-nash-equilibria-in/xk923bc3gp4/29#

Ecology/Economics

A Limit to Globalization

http://knol.google.com/k/klaus-rohde/a-limit-to-globalization-fuzzy-chaos/xk923bc3gp4/28

Free Markets, Free Trade, Ecology

http://knol.google.com/k/klaus-rohde/free-markets-and-free-trade-ecology-and/xk923bc3gp4/25#

Philosophy

Schopenhauer’s Philosophy
http://knol.google.com/k/klaus-rohde/a-crash-course-on-schopenhauers/xk923bc3gp4/45#view

I have been busy with scientific work over the last week or so, but yesterday I looked at some news items and came across these:

Rod Blagojevich, the governor of Illinois, indicted for trying to sell Obama’s Senate seat for personal gain, Bernard Madoff, the US financial guru and former Nasdaq chairman, released on bail after having been arrested earlier for decades-long fraud leading to the disappearance of nobody knows how much but estimated at around US$50 billion, US$120 billion spent for reconstruction  in Iraq without much success, and - such a small item that it is hardly worth mentioning - fraudulent loss of at least US$35 million by Dreier L.L.P.

In this context, the following excerpts from the autobiography of Alan Greenspan, the former Chairman of the Federal Reserve: “The Age of Turbulence” 2007, page 431, may be of interest. He writes: “Indeed, very few regulators of my acquaintance can give me examples of fraud and embezzlement unearthed by anyone other than a whistleblower.” …… “But in truth, there is no way for an audit committee, new or old, to uncover wrongdoing short of deploying a vast army of investigators who would smother the firm with costly oversight that would likely stifle corporate risk taking and ultimately threaten the viability of the company.”

So, risk taking should not be stifled! We are just experiencing the consequences of excessive risk taking. I wonder whether Greenspan would have written this now, after the big crash has occurred and is occurring.

I recommend to read  E.F. Schumacher’s (1973) classic : “Small is Beautiful. A Study of Economics as if People Mattered”. He traces many of our present problems (in 1973 bad enough, but much worse now, because nobody listened) to our “materialistic” philosophy of life, leading to an over-emphasis on large size and simply greed. Among other things, he suggests that personal ownership of means of production is really justified only if the owner actively participates in the production process, and should be restricted to relatively small enterprises (a few 100 people).

If you want evidence for greed and the disastrous effects, consider the present financial crisis with millions losing their jobs, and look at the  smallest fish of the few examples mentioned above, Dreier:

according to the N. Y. Times 14.12.08: “Their health insurance is in default and the firm will not be able to make its $2.6 million payroll on Monday, lawyers there say.” However, “Mr. Dreier’s lifestyle includes a waterfront home in the Hamptons, a Manhattan triplex and a place on Ocean Avenue in Santa Monica, Calif. He kept a Mercedes 500 in New York, an Aston Martin in California, and a 121-foot blue and white Heesen motor yacht with a Jacuzzi and a crew of 10 docked in Manhattan or St. Maarten. Associates said the boat, the Seascape, was the site of late-night parties at which Mr. Dreier, who is divorced, was often joined by an attractive young crowd.The law offices themselves at 499 Park Avenue were like modern art galleries. In court papers filed this week, the comptroller for the law firm reported that $30 million to $40 million of the firm’s assets had been spent on art. Among Mr. Dreier’s holdings were works by Picasso and a Warhol depiction of Jacqueline Kennedy Onassis.”"

The autobiography of Alan Greenspan, the former chairman of the Federal Reserve (The Age of Turbulence, 2007) reads like a bible of free market fundamentalism or neoliberal economics (as little government interference as possible, markets can regulate themselves !). There is frequent reference to Adam Smith’s wisdom. According to press reports and TV interviews, Greenspan has now changed his mind. He admits that he was wrong in bis belief that banks could regulate themselves.

See also:

http://blog.une.edu.au/klausrohde/2008/10/09/debunking-economics-steve-keen/

http://blog.une.edu.au/klausrohde/2008/10/06/nonequilibrium-in-economy-george-sorosthe-new-paradigm-for-financial-markets/

and my knol article

http://knol.google.com/k/klaus-rohde/free-markets-and-free-trade-ecology-and/xk923bc3gp4/25#

Nevertheless, I cannot suppress a feeling of admiration for somebody who’s entire life’s work was based on a deeply ingrained belief which he has now, at the age of over 80, thrown overboard. Let’s hope that many others, far younger, will follow him. - On the other hand, what else could he have done? The evidence against the holy grail of  free market fundamentalism is fairly strong.