Assault of Thoughts

A lot of major blogs have "link dump", end of the day wrap ups. At the end of a work day, the blogger generally posts a bunch of interesting links without much commentary. I assume this is the material that they've read and thought was important, but either didn't have much time to comment on, or anything much more to add. I find myself in this situation a lot too. I also try to keep what I post on here and on Facebook more general in nature, so I don't always get to comment on the more nuanced things that I think about (and often I don't feel fully up to the task of commenting on them anyway). So I'm going to start the "link dump" practice. Hopefully it will also keep activity at a steadier pace on here.

I've also noticed that these regular "link dumps" often have catchy titles... so mine will be "Assault of Thoughts". Literally speaking, it seems appropriate enough - I'm just going to be throwing a bunch of material at you. It comes from perhaps my favorite John Maynard Keynes quote: "words ought to be a little wild, for they are the assault of thoughts on the unthinking".

So for now:

- Yglesias links Mike Mandel's thoughts on the net national savings rate

- An Austrian School of Economics blogger and I spar over the liquidity trap, an idea that's been hogging a lot of my brain cells reccently

- Extended Taylor Rule bitching by John Taylor

- Krugman discussing the "depression within a depression" of 1937

- A less common argument for quantitative easing by the Fed

- Arnold Kling on Bernanke's speech to the AEA meeting in Atlanta: Bernanke defends low rates in the early 00's, and Kling agrees. Bernanke's position was not surprising to me, Kling's was. Apparently Krugman agrees too.

Guantanamo Prisoners

Andrew Sullivan points out an incredible resource: a full list of all 779 detainees at Guantanamo Bay. For those of you not interested in purchasing a book on this, a great deal of information is available here, here, here, and here. All prisoners are listed on these links with their country of origin and release date (for those that have been released). Most prisoners also have links associated with them to earlier posts on the author's blog, or relevant news items. This obviously isn't comparable to the Gulags or anything like that. We can't forget that these prisoners were captured precisely because there was reason to believe they were committing heinous crimes against the U.S. and against humanity. They needed to be imprisoned and interrogated. At the same time, a lot of what happened at Guantanamo does soil the reputation of the U.S., and went beyond what was needed to effectively prosecute the War on Terror. Indeed, some of the harsher methods used at Guantanamo made the fight against terrorism less effective; this was the very basis for most of the opposition.

The prison's operation was also of dubious constitutionality and legality. What is the purpose of fighting an enemy that is trying to destory our institutions if we abandon those institutions ourselves? Guantanamo's legacy is complex. I have a lot of reservations about what went on (and is going on) there, although I don't have a problem with it's mere existence. This complexity requires sober deliberation, and sober deliberation requires access to information. This compilation of information on the detainees is ample fodder for the sort of deliberation we need. Let's learn who these men were.

The Boston Tea Party

Eleven score and sixteen years ago today, a rowdy bunch of Bostonians dumped 342 chests of tea into Boston Harbor, to protest the Tea Act of 1773. Their cry of "no taxation without representation" helped to catapult murmurs of colonial dissatisfaction into full-scale resistance to British rule, which of course would eventually culminate in armed resistance during the American Revolution.

One of the most unfortunate things for me about how the Boston Tea Party has been remembered is how the recent "Tea Parties" have mangled the purpose of the movement. Many today are satisfied with truncating "no taxation without representation" after the first two words, when arguably it was the last two words that were most important to the colonists.

The Tea Act of 1773 actually made tea cheaper for the colonies. While previously existing duties on tea remained intact, the Tea Act effectively eliminated the need for British middlemen that the East India Company had to trade through to bring tea to the colonies. This lowered the price of tea in the colonies considerably, allowing the East India Company to undercut tea smugglers.

The problem was that the Townshend duties remained on the (cheaper) tea - duties which had been imposed since 1767. Colonists vehemently opposed these duties for two reasons. First, they were not represented in the Parliament that levied the tax (hence, "no taxation without representation"). That tax wasn't crushing, but the colonists had no role in imposing the tax, and they had no way to redress their grievances about the tax. Second, the Townshend revenue was used specifically for the purpose of keeping the colonies dependent. Previously, colonial assemblies (where the colonists did have representation) paid the salaries of colonial officials and judges. These officials and judges were therefore dependent on the people. After 1767, however, many of these colonial officials and judges were paid from the Townshend revenues. The Townshend Act therefore forced Americans to pay taxes that they did not assent to, to pay the salaries of public servants that the colonial assemblies no longer had control over. The concern was that their freedom and right to self-governance was taken from them quite deliberately.

The tax itself was virtually irrelevant. The issue was self-government, freedom, and representation. I personally find it incredible that the Glenn Beck/Ron Paul/"Tea Party" crowd has actually convinced themselves that (1.) their recent concerns have anything to do with the legacy of the Boston Tea Party or the Founders in general, and (2.) that somehow everyone that disagrees them has abandoned the legacy of the Founders.

I find it perfectly conceivable that some of the Founders would be surprised at how large government is today, as well as surprised at the taxes we levy. However, given the social and economic changes that have transpired since the time of the Founders they may have found it perfectly appropriate. Regardless, none of them would deny that the American people have decided how the American people are to be governed.

The claim that we are somehow exposed to the risk of "tyranny" trivializes the experiences of those who actually suffered under tyranny, who didn't have an opportunity to decisively elect the man or woman of their choosing (as we have elected Barack Obama), and who didn't have the opportunity to elect their own representatives in the legislature (as we have for centuries). Honestly, when I hear someone suggest that by disagreeing with them you're trampling on the legacy of the Founders it turns my stomach. It's one thing to find solace and inspiration in the Founders to support your own views, today. That's fine. But to insult someone else by claiming that legacy for yourself - and doing it in such a mangled way - is very unfortunate.

The Limits of Monetary Policy (or, "Why DeLong, Krugman, Yglesias, and Sumner are Wrong")

For those of you not connected into the economics blogosphere, the Federal Reserve has been facing a tidal wave of criticism lately. There's the Ron Paul "end the Fed" crowd, of course, but there is also a rising tide of critics arguing that the Fed isn't doing nearly enough to solve the unemployment problem.

The criticism is logical enough: the Fed itself predicts extremely low inflation, with almost no inflationary pressure to speak of, combined with extremely high unemployment for several years to come. We're talking about a decade to get back to 5% unemployment, as I understand it. The Federal Reserve argues, however, that it's largely tapped out. It has lowered interest rates as far as it can and it doesn't have many tools left. Several commentators (from both sides of the aisle, but mostly from the left) are astounded:

http://tinyurl.com/y9grzvs

http://tinyurl.com/yblq42y

http://www.nytimes.com/2009/12/11/opinion/11krugman.html

http://blogsandwikis.bentley.edu/themoneyillusion/?p=3192

http://tinyurl.com/yb92mlw

To be fair, their incredulity is understandable. Bernanke himself is famous for promoting the idea of unconventional monetary policy and praising the "quantitative easing" that the Bank of Japan engaged in in the 1990s. Joe Gagnon, at the Peterson Institute for International Economics, has made waves by proposing exactly what Bernanke promoted back then - several trillion dollars worth of asset purchases to make monetary policy even more accomodating. Right now, with interest rates at 0%, there is no "traditional" way for the Fed to be more expansionary. Purchasing a ton of assets would pump more money into the economy by putting money into the hands of the current asset holders.

So I've thrown the critics several bones. I've said their criticism is "logical enough", and that their "incredulity is understandable". But ultimately, I think the relentless demand for Bernanke to engage in vigorous quantitative easing is highly misplaced. When the Fed lowers interest rates, lowers reserve requirements (requiring firms to hold less reserves allows them to expand credit more easily, which expands the money supply), or expands it's own balance sheet through normal open market operations, monetary policy keeps market distortions to a minimum. Everyone faces the same interest rate and everyone faces the same reserve requirements. Competition picks the winners, the Fed simply sets the macro-trajectory for the economy.

"Quantitative easing" is different; it involves an aggressive expansion of the Fed balance sheet by purchasing all sorts of assets (including government bonds). The problem with this is that the Fed ends up "picking winners". Specific market players get an artificial leg-up. These activities pose a serious risk of distorting market activity and market signals. As a rule of thumb, that's a very bad thing. In exceptional circumstances - such as a liquidity trap - it may be worth the risk.

But even if we determine that it is worth the risk in a liquidity trap, who should take that risk in a free society? I would argue that an elected, representative body should engage in those activities - not an appointed board of a central bank. If we're going to engaging in potentially distortionary measures, it needs to be done in the open, and people need to be accountable for these decisions. This is fundamentally what fiscal stimulus (i.e. - deficit spending from the government) does. It's an attempt to "soak up" the extra savings that are causing the economy to stall out, but it's an attempt that bears a real risk of "picking winners". What winners are Congress and the Obama administration picking? Infrastructure. Green jobs. Home-owners. Car buyers. Education. Some of these choices may be good, some may be bad. The point is "we the people" are making these choices, not a central bank.

I have a great deal of respect for the Fed, and I think they have a hugely important role to play in this crisis. I don't even begrudge Ben Bernanke the quantitative easing he's engaged in thus far as an extreme emergency measure. But to insist that this become the order of the day - that this is how we should wage an extended fight against depression - seems very dangerous to me. I do think the Fed is largely tapped out as far as what it can do - not because they can't do more, but because they shoudln't do more. It's time for Congress to step up.

Two additional thoughts:

(1.) Willem Buiter seems to agree with me. I ran across this after I formulated my thoughts (mostly in response to Yglesias's series of posts), but I'm happy to see he agrees with me, and

(2.) I have lots of lingering reservations about quantitative easing that I may comment on in the future. As a teaser, I'll just say it strikes me that quantitative easing risks prolonging a liquidity trap. The Fed is increasing the supply of loanable funds available to institutions that want to borrow, which should drive down the real interest rate - when what we want to do is drive it up (so that the interest rate floor is no longer binding). The only redeeming quality of quantitative easing, it seems to me, is that it may create inflation which would also make the nominal interest rate floor non-binding. I'm still noodling over this - but those are my initial thoughts. This seems to me to be a classic example of what Keynes meant when he said that Roosevelt's policies were like "a slim man trying to get fatter by buying a bigger belt".

My own email from CRU (this one was not hacked)

A few days ago I sent an inquiry to East Anglia University. I had been getting information that the "destroyed" data wasn't destroyed at all - it was just housed on a central government server. Which, to put it mildly, is a complete non-issue. I had heard the research unit at East Anglia made a statement to this effect in response to requests, but I couldn't find it online. So I wrote:

"Hi - I was wondering if you had a press release or link on your website explaining that the raw data that CEI is so concerned about is actually being housed at NOAA. I'm trying to respond to questions from readers on my blog about this, and I've heard you quoted in articles suggesting that the raw data is still available - but it would be much better to see a statement to that effect on your website. Thanks"

I got this response today:

Thank you for your message and many apologies for not getting back to you more quickly. The University of East Anglia will make all the data accessible as soon as they are released from a range of non-publication agreements. Publication will be carried out in collaboration with the Met Office Hadley Centre. Please see our statement at http://www.uea.ac.uk/mac/comm/media/press/2009/nov/CRUupdate for more information. As you may be aware, the University of East Anglia (UEA) has announced that Sir Muir Russell KCB FRSE will head an independent review into allegations that arose from a series of hacked e-mails from the Climatic Research Unit (CRU). Colleagues in CRU have confirmed their commitment to the quality and veracity of the science that relates to global warming. Their academic standing is a matter of public record and their work has been extensively peer-reviewed. The hacking is subject to a police investigation with which the University and its staff are fully cooperating. You will find all current information at www.uea.ac.uk/mac/comm/media/press/CRUstatements These pages will be updated with news as it is available.

Just thought people might be interested in the update. My understanding was that all their station data is (and has always been) available here. Now - how much do you want to bet the guys at Cato and CEI that were pestering them for this data will never actually look at or analyze it?

In other Climategate news, Ezra Klein had a great piece yesterday on the more mundane climate research that is going on. And guess what - it all points to a warming planet. Maybe the bigshots are hyperbolic and deceptive, but you can't seriously think everyone drawing these conclusions is pulling the wool over our eyes.

My feeling on climate change is that human produced carbon is warming the Earth at a pace faster than normal processes operate. It seems to me there's very little doubt that we're heading for a warmer planet, and that we are making that happen. Does that mean Florida will be under water, crops will fail, and billions will die? I suppose "it could happen", but I don't think we have any evidence to convince us that we're facing doomsday. But we are facing significant change. Given my economics training, I recognize that we burn more carbon than we should because we don't bear the costs of burning that carbon. When you don't bear all the costs and benefits of a choice, you won't make the optimal choice - and when somebody else bears the costs of your consumption you're going to consume more of that product than is optimal. For that reason, I think cautiously embracing policies like a carbon tax or cap and trade is an eminently reasonable thing to do. However, humans also have a tendancy to innovate our way out of problems. So I don't think draconian measures now are justified, because twenty years from now (when collectively we'll be considerably smarter) we may have an even better, and a much less painful solution.

So I don't like to think of myself as an "alarmist", but I'm not apathetic either, and I try not to second guess the people who have spent their lives working on this.

Enjoy the email and the links.

North Korea and Inflation

The market is just a network of social relations - social relations which are orchestrated by prices which signal individual abilities, individual needs, individual hopes, and individual ambitions. Make the signals meaningless and social interaction becomes impossible. Induced inflation distorts those signals. Hyper-inflation destroys them. North Korea unleashed this weapon today in an attempt to destroy fledgling private markets.

I've spoken at times on the value of low, constant inflation in a modern economy. I've been meaning to talk about this in more detail, with reference to "inflationist" movements in early America, and in the late nineteenth century. A lot of these sorts of ideas are grounded in the work of Keynes, and consistent with more recent monetarist theories. But it's important to distinguish the argument for a low, constant level of inflation (as opposed to violent inflationary and deflationary episodes) from the argument for high spikes in inflation as a confiscatory tool. Keynes spoke to inflation as a weapon of the state in the months after World War I:

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become 'profiteers,' who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

- John Maynard Keynes, 1919

Health Reform and Premiums

The Congressional Budget Office (CBO) recently released estimates for the Senate health bill, and what they've said about premiums has caused some argument among the experts. And by "argument", I mean they take entirely opposite views on what direction the CBO suggests premiums are moving in. Gruber, Krugman, and Yglesias all contend that premiums will actually go down. The CBO report itself seems to say in several places that premiums will go up. What's going on? Gruber, Krugman, and Yglesias's claim should sound strange to people. The Senate bill is sort of like Massachusetts health reform writ large, and we didn't see premiums decline there.

I think Megan McArdle is largely on target in her explanation of what's going on, and she is firm but fair with the dissenters. Basically, if you look at the same type of plan before and after reform the premiums are reduced - that's what Krugman and Gruber are emphasizing. That means something for sure, but there's a reason why the CBO didn't highlight that. If people were free to choose what health insurance they wanted, it would be meaningful to have the same plan have lower premiums as a result of reform.

The problem is, they aren't free to choose (to borrow a Milton Friedman line). A slew of mandates are included in reform, not the least of which being the mandate to simply have insurance. So risk pools are wider, which does provide the opportunity to furnish the same insurance for less money. But if you're not allowed to buy the same insurance, what does that matter? If everyone had the same options available to them that they did before the reform, I would say look at how the premium of different types of plans change before and after reform. But they don't have the same options - they are forced to buy more. So looking at the change in the same plan is meaningless - instead you have to look at the change in the premiums people will actually end up paying.

And that is supposed to increase. And we shouldn't be surprised - as I've said for a while now, the mandate dumps tens of millions of people into the insurance market. You can't have a demand shock like that and reasonably expect a drop in prices. It just doesn't pass the smell test. Does this mean it's a bad bill? Well it's at the top of the list of arguments you would make for why it's a bad bill. I think your ultimate position on the bill itself is going to have to be based on more than that. The bill does a lot of other things that I think are good. The mandate, in my mind, is a very bad idea. But if premiums continue to climb the mandate can always be adjusted later. The question for people (who feel the way I do on the mandate) is - are all the Medicare reforms, all the advances in tax policy, all the expansions of Medicaid, the exchange, etc. still better than the status quo even if they're burdened with an odious mandate? That's a question that people have to answer for themselves. I think on balance we need to do something, and I'd prefer we didn't jump into an expansive public option. This seems like the best way to do that. The problems associated with the mandate seem smaller to me than the problems associated with doing nothing. But reasonable minds may disagree.

Alexander Hamitlon Hip-Hop Tribute

Lin-Manuel Miranda does a hip-hop tribute to Alexander Hamilton. Really good. You can't grow up in Virginia and not have some critiques of Hamilton, but he gets way more crap than he deserves. I'm a fan.

What I like most about the song is that it really focuses on his life. Too many rehashes of Hamilton focus on his ideas, many of which had a great deal of merit and many of which didn't. But behind all that we forget what an extraordinary life he had, how hard he worked to achieve what he did, how hard he fought for American independence, and then for the Constitution, and how nothing in his life was just handed to him.

Mars for America's Future

"Our next generation must think boldly in terms of a goal for the space program: Mars for America's future... An American colony on a new world."- Buzz Aldrin

For some time now I've been deeply interested in the human future in space. It's not something I know about in any great detail; I'm not one of those people that knows NASA history like the back of my hand, and I'm not a Trekkie. But I am deeply inspired by the history of human space exploration that I do know. Even more central to my interest, as a social scientist I'm inspired by thinking about the prospects for human progress. Markets, political liberalism, and technological innovation have rapidly lifted humans from being sedentary, impoverished, unhealthy, short-lived (albeit quite intelligent, thoughtful, and artistic) animals to new heights of civilization, sophistication, distinction, and promise. When you are on an exponential trajectory like that your thoughts quickly turn to the future and how much better it will be tomorrow. I think Mars is going to play a large role in that future, and I want to use this post as an opportunity to sketch out a few thoughts about (1.) what is this future? (2.) why Mars? (3.) why is this so important to pursue as soon as possible?

Our Interplanetary Destiny. It's hard to provide strong evidence for a forecast like this, but I think it should be clear that the human race has an interplanetary destiny. Perhaps eventually an interstellar or even an intergalactic destiny, but for now let's just stay with interplanetary. Our population has grown at an exponential rate in the last several centuries, and population growth has been accompanied by technological development. The technological development we've experienced has two primary effects on our interplanetary prospects: (1.) we've made mass destruction of human populations more likely, and (2.) we've repealed many of the constraints on normal species population dynamics by using technology to both eliminate threats to human existence and maximize the efficiency with which we use the resources we need for survival. In other words, our technological development has made it quite possible that our exponential population growth may not level off, at the same time that we've developed the means to kill millions of people, and an industrial economy that risks turning our own planet into an environment more hostile to human habitation. Stephen Hawking has cited many of these pressures and threats in his recent call to colonize space. He suggests that "our only chance of long term survival is not to remain inward looking on planet Earth, but to spread out into space."

Why Mars? As Robert Zubrin has remarked, "Mars is where the future is. Mars is the closest planet to the Earth that has on it all the resources necessary to support life and therefore technological civilization. It has water; it has carbon; it has nitrogens; it has a twenty four hour day; it has a complex geological history that has created mineral ore; it has sources of geothermal energy. Mars is a place we can settle." Mars also has higher gravity than the Moon, another option for a space colony that is mentioned. It provides closer access to the asteroid belt which may be an important mining resource in the future. It provides the best prospect for terraforming, which will be necessary for the development of human civilization.

Why a public initiative? John Stuart Mill, an important 19th century economist and philosopher, wrote about the necessity of the role of the state in colonial enterprises. He wrote:

"If it is desirable, as no one will deny it to be, that the planting of colonies should be conducted, not with an exclusive view to the private interests of the first founders, but with a deliberate regard to the permanent welfare of the nations afterwards to arise from these small beginnings; such regard can only be secured by placing the enterprise, from its commencement, under regulations constructed with the foresight and enlarged views of philosophical legislators; and the government alone has power either to frame such regulations, or to enforce their observance."

While private interests will certainly play a part in the colonization of Mars, the greatest benefits of a Martian colony will accrue to our descendants, generations after we are dead; generations that will build a new, permanent human civilization on the Martian surface. I have a great deal of respect for the market, but market action relies on the pursuit of self-interest, not the interest of future generations and certainly not the interest of generations in the far distant future. In this sense, the market is extremely conservative, and it will overlook and ignore the pursuit of unprecedented benefits because they are not immediate benefits. State action obviously introduces a host of new efficiency problems, but it is preferable to relying on a market that has no way internalizing the benefits of a Martian colony. There is also a moral advantage to state-led colonialism on Mars, compared to all other colonial ventures in the past. Mars, for all intents and purposes, is lifeless. We may potentially find some algae or lichen, but nothing that will introduce a great moral dilemma. Mill's insistence that "philosophical legislators" would have the "foresight and enlarged views" to prosecute a colonial venture makes us cringe now, because we know about the colonial ventures of Great Britain during Mill's lifetime. But that oversight on Mill's part isn't relevant for Mars - and the remaining portion of the argument - that the state is best suited to have "a deliberate regard to the permanent welfare of the nations afterwards to arise from these small beginnings" is still valid.

Why an American colony? The Buzz Aldrin quote that initiated this post specifically spoke of an American colony on Mars, and I strongly agree with him. But why? Why bring 20th century nationalism into the 21st and 22nd century? To be honest, I think nationalism will inevitably be downplayed in the 21st and 22nd century anyway, but I still think that it is important for America to make the first move. The world is integrating, and I think this integration is as inevitable as our interplanetary destiny. Given our advances in transportation and communication technology, our recent embrace of the idea of universal rights, the indisputable economic benefits of openness, and the clear record of nationalism in producing horrifically bloody conflict, I think the inertia behind globalism is tremendous. But who will define this new world order? It largely depends on when you think that world order will emerge. If it happens in the next several years, it is likely that the U.S. will shape and define it. If we wait even just another decade, it will be the U.S. in partnership with Europe. Wait longer than that and China, India, Russia, or even Brazil will play a larger role. I think each of these partners - even China and Russia - will come to the table in good faith. But just because they come in good faith doesn't mean they won't have a fundamentally different view of what life on Earth should be like. The new world order must be a liberal world order, and ideally a constitutional liberal world order, and the United States must lead the effort if we want to guarantee that.

The same is true of life on Mars. The antecedents of Martian civilization will play a major role in determining the nature of Martian civilization, and an American initiation will guarantee the promotion of American values. In perhaps two centuries (closer to our time now than we are to the American Revolution), I think we'll probably have a functional society on both Mars and Earth, as well as functional communities in space stations in between the two, and we'll probably have a single federated government. It might not happen, but I think it's quite likely. We need to concern ourselves with what that civilization will be like. If Washington and Jefferson hadn't concerned themselves with what the American civilization would be like two hundred years in the future, we would not be enjoying the life we have today. This is why I'm cautiously open to ideas like a global reserve currency, and a global government, not to mention the rapid establishment of a colony on Mars. America may get a second wind, but it may not. This is our time to shape these institutions, and I think it would leave an awful legacy if we squandered that opportunity. We have something important to offer the world.

Culture, costs, and one critique

I think Evan's post is largely on the mark. First I'd definitely agree with him that visionary reworking of an entire system is usually the wrong way to go about change. The system that we have now is an emergent result of the decisions of millions of households and communities. While systemic institutional change is always important, we need to recognize that change will ultimately rest on the decisions of individual households. Even if you have a great degree of faith in top down institutional change (which sometimes isn't entirely unwarranted), you can expect a great deal of social strife if we don't adjust our expectations of normal life in concert with those changes. Evan and I often critique blind adherence to the idea of atomized individualism on this blog. I think this is an important place to point out the situations where we think individualism is appropriate, and where individual and family level decisions not only are the fulcrum of change - they are also intimately tied to real change at the level of the community or the collective.

I'd also like to highlight one economic efficiency benefit of taking a cultural approach to food, rather than just a commodity approach. When economists worry about "sustainability", they're often primarily worried about what are called "externalities", which can be either positive or negative. An externality is a cost or benefit which because of property rights arrangements are not factored into a market price. For example, the trees of the rain forest may belong to someone who can sell them to farmers who cut them down so that cattle can graze. But some of the benefits of the rain forest accrue to everyone - not just the owner of the trees and land. For example, they help to clean carbon dioxide out of the atmosphere. This is a very real, valid benefit. If the owner of the trees were trading away his air quality alone, then we would expect the free market to provide him with the best possible tradeoff between the money he could get from selling the rain forest and the quality of the air he breaths. But the owner of the rain forest is also trading away other people's air quality, and he has no incentive to efficiently trade that because it's not a benefit he enjoys. In this situation, a private market would cut down too much rain forest to grow beef for McDonald's. The market, because of the imperfect structure of property rights, is inefficient.

What does this have to do with culture? When we take cultural considerations into account, we are by definition considering costs and benefits beyond our own individual costs and benefits. This is obviously no guarantee of a perfect solution either, but it does help to more efficiently arbitrate between private preferences and the costs and benefits impacting society as a whole. Market exchange enforces a culture of reductionism that works wonders in efficiently distributing the many products that have only private costs and benefits. But we are fooling ourselves if we think that commodification is thus a universally applicable way of understanding our world. "Culture", however amorphous, is another perfectly acceptable prism through which we can view the world - particularly when we are concerned with something like food, which enmeshes us in a broad community not just of other human beings, but other species, which are all affected by our decisions, and yet don't always have a say in those decisions.

I'll end on a critique, though. Despite my insistence that commodification isn't always appropriate, I'm not about to suggest (and I don't think Evan was either) that food isn't to a large extent a commodity or that markets aren't an appropriate way to distribute food. It's also important to point out that aesthetic primitivsm on the part of the well off is dangerous if it is promoted as an ethic for the entire world. I'm reminded of this point after hearing news of the death of Norman Borlaug: botanist, Nobel Prize winner, and driving force behind the so called "Green Revolution". Borlaug worked to genetically modify plants to increase their yields. He was also a proponent of the use of pesticides, so long as they weren't deleterious to human health, and criticized environmentalists that opposed all pesticides and genetic engineering on principle. In doing so, Norman Borlaug broke the back of much of human starvation and allowed economies to develop beyond their rudimentary agrarian bases. To put it simply, Borlaug made food production very cheap. Now, I don't know enough about his work to know if his advances contributed to the problems that Evan's book describes. But he highlights the danger of pursuing primitivism for primitivism's sake. It's great that more people want to eat organic vegetables grown on small plots, or free range chickens. That's wonderful. But six billion people cannot survive on that form of production. Perhaps the relatively well off can buy everything at a local farmer's market. But when the relatively well off think about the wider food culture they really need to consider the people that can't buy there. We need to consider the tradeoffs and compromises we're willing to make. Maybe genetic modification by cross breeding to feed India is OK, but changes at the genetic level are too dangerous to rush forward with (note to readers: we already have rushed forward with those sorts of changes - this is just a hypothetical). Maybe instead of taking up lots of land with a free range chicken farm we should just decide to not eat chicken, or eat it far more rarely. There are very real reasons why men like Borlaug launched the Green Revolution. This seemingly corporatist venture was launched out of compassion, not concern for profits. As chic as primitivism is today, the human race hasn't historically enjoyed it's experiences in the vice of the Malthusian dilemma - and many of the strongest proponents of primitivism are the ones that are the farthest removed from their ancestral peasantry. But ultimately, an informed cultural (rather than commodified) approach to food will recognize this. It will recognize that family farms are valuable to the community, but that ample food supply is too. Indeed, I think taking a bird's-eye, cultural approach to these questions is the only thing that can strike the appropriate balance.