Digest: 10 December 2013
In What Happened On Easter Island - A New (Even Scarier) Scenario, Robert Krulwich (for NPR) discusses an alternative view of the fate of the Easter Islanders. While the prevailing view of the fate of the Easter Islanders is that they cut down all their trees and thus ultimately destroyed their means of survival, two anthropologists now believe that a different scenario took place. These anthropologists believe that the islanders gradually succumbed to a diminishing quality of life supported by the consumption of rats. Assuming that this new view is correct, Krulwich questions whether it is good news. Easter Island has constituted an example to be avoided, a micro foreshadowing of what will happen if we continue to over-consume the resources of the planet as a whole. Can it be considered a preferable course to have a slow demise, in which the quality of life drops over a time period sufficient to prevent the realization of that diminishment of quality. We live in the time we live in, we can hear stories of how things have been before, but all we can really know is what we directly experience. As Krulwich points out, humans are incredibly adaptable, we have learned to adapt to terrible circumstances, and to over time accept those circumstances as the norm. If choose to not simply be satisfied with survival regardless of its form, then we would do well to choose more carefully exactly what form our future may take. If we do choose carefully, then the nature of our survival may be less attractive than the extinction alternative.
In The Practical Incentive Effects of Different Approaches to Capital Requirements, Douglas J. Elliott (for The Brookings Institution) discusses the importance of choosing the right approach to capital requirements as large sophisticated banks incorporate the effects into their internal pricing models. The use of a risk-weighted asset regime generally encourages lower risk behavior, while a leverage ratio regime encourages higher risk behavior. It can be expected that in practice a hybrid method will be employed, but in such a case it is necessary to consider not only the incentive effect of the different factors, but also the result of their interaction when used together.
In Financing Tomorrow’s Cities, Lloyd’s of London discusses the challenges of preparing cities for the future. With the expected growth of cities, there will need to be substantial investment in infrastructure and services. But investment in urban development is a complex issue. Climate concerns mean that resilience, the ability to recover after natural disasters, must be built into cities. This is particularly important in light of the increasing costs of disasters where cities grow in both population and asset density. Recent storms Sandy and Haiyan have highlighted how severe these costs can be, particularly where the location is underinsured.
In America and the World: The Man Who Used to Walk on Water , The Economist discusses the diminishing reputation of President Obama and what he can do to get some of his credibility back. Obama is struggling both at home and abroad. While the blame for his difficulties can to some extent be placed at the doors of others, it cannot all be. Most obvious, his handling of the Affordable Care Act has left much to be desired, both in the management of its implementation and in his administration’s misrepresentation of certain implications of the law, but even more seriously he is not adequately responding to looming economic issues that need addressing. Abroad he faces problems on multiple fronts, particularly in his relations with foreign heads of state, and this sheds light on what is perhaps the fundamental domestic and foreign issue – his failure to follow through and engage in the hard work of building relationships.
In Legislative Verbosity: Outrageous Bills, The Economist discusses how the number of US laws enacted per year has diminished while the length of laws has significantly increased over the last sixty years. The result is that the most significant and important laws are now thousands of pages long, and are generally not read. If the falling in the number of laws were merely the result of cleaning up the now disallowed earmarking process it would not be such a problem, but as it stands the length of laws can often be attributed to self-interested lobbyist parties who slip clauses into unrelated bills that they know no one will read.
In Defense on a Diet: How Budget Crises Have Improved US Strategy, Melvyn P. Leffler (for Foreign Affairs) discusses that austerity in defense funding is not always a bad thing. Mapping military spending over the last century has shown that retrenching following conflicts can be problematic. Even those who support some cuts, such as President Obama, point out the importance of avoiding such pitfalls. But actually, looking at the periods following WWI, WWII, the Korean and Vietnam wars, and the Cold War, it is evident that austerity can be useful in forcing creative and necessary changes to defense strategy. The austerity the US defense establishment faces is not in any event particularly hard, even with cuts it still will be more heavily funded that all of its competitors combined.
In Technology May Compound Human Behaviour Risk, Lloyd’s of London provides a short interview with business thinker Margaret Heffernan. Heffernan argues that we would be wise to be very careful with the thought that technology will reduce human behavior risk – in fact, as technology is based on human created structures it can, to the extent of its capacity, magnify the faults in those structures just as easily as it can magnify the benefits of those structures. She recommends a more sensible approach as being one which seeks to accept the inevitability of bias, to understand that bias and its manifestation, and to diversify and consciously manage the biases that influence our results. To avoid acceptance of the manifestation of our biases in our technology is a form of willful ignorance, and as we allow the systems that are based on those biases to become more complex, the biases become even harder to detect.
In Europe vs Amazon: Anger Rising, David Streitfeld (for The New York Times) discusses the different perspectives on Amazon in the US and Europe. In the US, Amazon is hailed as a paragon of modern economic excellence. In Europe the view is dimmer and stories have arisen in the media about some of the costs of its business model. Aside from its effect on smaller local businesses, new concerns have arisen regarding its labor conditions – both a Financial Times article and a UK Panorama special have highlighted inhuman working conditions at Amazon facilities where efficiency is prized far above the health and well-being of employees.
In Keeping Science in the Right Hands: Policing the New Biological Frontier, Ronald K. Noble (for Foreign Affairs) discusses the risks of synthetic biology and the methods that must be taken to safeguard the development of scientific development in light of those risks. Noble recommends that a global coordinated mechanism must be developed if we are to effectively police the development of new scientific endeavors that entail the massive risks that synthetic biology entails. All relevant parties must be included in this effort if it is to be effective in protecting against harm while maintaining the ability for scientific understanding to develop.